Procurement professionals have always held an essential role in managing supplier relationships. However, recent years have seen their tried-and-true methods put to the test in the unfamiliar domains of ESG. With an increasing burden of responsibility on the procurement department to ensure suppliers are up to par on a conveyor belt of increasingly important legislative and compliance standards, the stakes have never been higher for individual and organizational risk.
Naturally, the default has been to try and make these "new data fields" business-as-usual (BAU). Incorporating them into your ERP/PLM system specs, updating your sourcing policy, and applying top-down pressure to suppliers to "conform or else".
However, this BAU approach misses the shades of grey that provide the context for a supplier to take action: to compel them to share data or understand why this information is required by you. We consider this poor supplier engagement.
The benefits of effective supplier engagement are rarely realized unless a more nuanced approach is adopted. For the myriad of issues that fall under the ESG banner, you must move beyond simply measuring your suppliers to supporting change too. It will not serve you in the long term to solely quantify how much of a challenge you have. You must work collaboratively with your suppliers to reduce plastics, remove PFAS, or ensure you are responsibly sourcing materials (e.g., RSPO, FSC, Leaping Bunny).
The unfortunate truth is that the BAU approach is limited. The reality is that these new requirements, whether driven by brand objectives or legislation, will often impact all of your suppliers, covering potentially thousands of products. This means huge time and resource demands for you and your team. Coupled with the catastrophic reputational damage that can be done to your organization from a single human rights infringement - even if from your smallest supplier - no stone can be left unturned. Focusing on key suppliers is no longer a suitable approach for supply-chain risk mitigation.
The reason why companies like Supply Pilot exist is to enable you to overcome these pains. By providing the tools to scale your engagement to all suppliers, as well as the 6-step process to help you drive the necessary changes and make an impact in your supply chain, from supply-chain decarbonization all the way to removing chemicals of concern, our approach provides an issue-agnostic solution.
If you are looking for a way to engage your suppliers with your ESG strategy and promote transformative change get in touch today. For an example of how we apply this to sustainable packaging check out this working example.