If you experience difficulty viewing this message, please click here

www.forwardthinkinginc.com newsletter | latest edition | march 2011

It's spring time and thoughts of the strategist turn to the future and new beginnings! Most of our clients are seeing an upturn in their businesses and a renewed confidence about the future, which is pleasing to witness. Many are managing a process of change, in one way or another, to equip themselves to capitalise on future opportunities. An area that is increasingly experiencing the impact of change from internal and external pressures is procurement. An emphasis on resource efficiency, climate change and sustainability has driven these agendas into the supply chains and procurement bodies of organisations. Many of our clients are starting to adapt to this change by embedding sustainability into their conventional procurement practices. The short article in this month's newsletter outlines our approach to implementing sustainable procurement principles. I trust that spring proves an uplifting time for all of you and the start of a new period of success for your businesses. Mark Whitman, Senior Consultant

testimonials Want to hear what people say about us? Please click here subscribe Want to hear more? Please visit our site and subscribe contact Have something you want to share? Please click here to email us unsubscribe To unsubscribe please click here A joint venture between forward thinking inc and Herman Miller forward thinking inc indigo house holbrooke place richmond surrey TW10 6UD t: +44(0) 208 939 2330 f: +44(0) 208 939 2331 An integrated approach to sustainable procurement Procurement is simply the process by which an organisation goes about acquiring goods and services. Unsurprisingly, the emphasis within most procurement departments is on price and quality. Most large businesses go through a five stage procurement process to maximise these benefits. Firstly, a sourcing decision is made by someone in the business. This person contacts the procurement department to initiate a Request for Information (RfI) procedure. The RfI is used as a filter to identify a shortlist of potential suppliers who are then invited to pitch for the contract based on a detailed specification. Proposals are assessed against selection criteria before a purchasing decision is made. The process is tempered by factors including the level of strategic importance of the purchase, supply and demand constraints and purchasing economies of scale. More recently, other factors such as sustainability have come to feature prominently on the procurement agenda ñ leading to the term sustainable procurement. Sustainable procurement was initially seen as a public policy initiative. Although there is no agreed definition for sustainable procurement, in essence the term takes into account both financial as well as socio-economic and environmental factors in making a purchasing decision. Nowadays, many public and private sector organisations practice sustainable procurement; albeit at differing levels of success. Amongst organisations that have adopted sustainable procurement principles the barriers to implementation are similar. Key barriers include: Short vs. Long-term cost: Price premiums for sustainable goods and services are often measured against short-term budget targets which don't internalise long-term 'total' costs Setting a standard: Establishing criteria that are challenging yet balanced can prove difficult. Overly taxing criteria tend to constrain purchasing options; whereas basic measures lack integrity and are seen internally and externally as mere 'tick box' exercises Prioritisation and focus: For organisations procuring thousands of goods and services; knowing where and what to focus on is a challenge An integrated approach to sustainable procurement is key to successful implementation. Each stage of the procurement process should be reviewed and a set of specific tools, guides and processes developed to ensure consistency. Sourcing decision: The most sustainable decision is not to buy at all ñ it is also the most economically beneficial. The sourcing decision should be well founded on a qualified need. Practical alternatives to purchasing should be considered; such as rental, reuse, sharing, temporary use and future use Supplier shortlist (RfI): General sustainability criteria should be incorporated across all supplier selection procedures. At a minimum, policy evidence, standard compliance and legal history should be investigated Specification (RfP) and Assessment: Shortlisted suppliers should be scored against sustainability measures that are specific to the product or service being procured. Areas for consideration include raw materials, manufacture, transport, use, disposal, total life cost, labour standards and wider social impacts Supplier engagement: Suppliers should be engaged at an early stage to help drive continual improvement. An approach which is collaborative and supportive and not intimidating or threatening is key to success Focus initially on a prioritised list of high impact goods and services. Often these goods and services map conveniently with an organisation's key suppliers and therefore existing engagement can be reinforced through the implementation of sustainability principles. Sustainable procurement requires effective collaboration between the procurement department and the wider business. The implementation of sustainability principles should seamlessly align with broader business objectives. For a full version of this article please email Mark Whitman