Written by Sarah Clarke, CMO, Vizibl
Poor supplier sustainability management leads to waste and inefficiency – with serious consequences for people and planet.
It requires a secure platform that provides the right data at the right time, that promotes ease of communication and collaboration, and that enables you to prove progress against measurable objectives. This technology enablement should be complemented with expert consulting to ensure that best in class ways of working is established. Effective supplier management should enable you to increase the innovation potential and sustainability of your supply base, and support key business goals around transformation and growth.
Not all partners are born equal, nor all supplier sustainability platforms.
Here are five key points to keep in mind when choosing your supplier sustainability solutions. Together they will support you in making the right choice and giving yourself the best chance of reaching your procurement ESG goals.
You need the right data
Accurate, transparent, and available data is essential to building a more sustainable supply chain.
The right platform will enable you to compile and display data about the environmental impact of your business and your partners, integrating sustainability data from a variety of credible sources. This is likely to include primary datasets, data from initiatives such as CDP or SBTi, and third-party data sources.
Having this data means you can target and improve the partners or processes that are most inefficient, carbon intensive, or detrimental to communities – as well as view the environmental and social impact of your business as a whole. This holistic, joined-up analysis is particularly important when tackling the scope 3 emissions that are too often ignored – with disastrous consequences.
For those less familiar, scope 3 emissions are indirect emissions that occur in the value chain of a company including both upstream and downstream activities. CDP estimates that value chain emissions are on average 11.4 times higher than a company’s own operational emissions.
Going green requires constant collaboration and communication
Truly effective supplier management of any kind relies on robust lines of communication, and approaches to supplier relationship management and supplier sustainability management are increasingly focusing on not just communication, but true collaboration. Given the number of touch points involved and the difficulty of orchestrating across two different organisations, this can be difficult to achieve without the right tool to facilitate it.
A suitable supplier sustainability platform will transmit actions, project updates, tasks, events, and issues to all relevant stakeholders, no matter which organisation they belong to. It should allow you to assess sentiment from team members on both sides of the relationship, and allow users to flag any risks they detect in the relationship.
It should also allow for effective supplier innovation, allowing you to source new products and solutions to pressing problems from existing suppliers. This in itself requires robust communication and clear governance processes. The ideal supplier sustainability platform should build these principles into every interaction.
Prove value with reporting
Given that the aim of any supplier sustainability or sustainable procurement initiatives is to make improvements over time, the solution you select should allow you to measure, track and prove this progress with robust reporting functionality.
Your platform of choice should enable whoever needs to access this reporting with the ability to do so easily. It should be fully configurable and customisable, allowing you to save reporting views and build bespoke dashboards for different stakeholders depending on their need-to-knows.
Large organisations are subject to more and more cybersecurity risks as technology evolves, and store enormous amounts of sensitive data on both their business and that of their suppliers. Any solution you choose should be purpose-built for the security and data protection needs of large organisations.
The most well-known and robust security certification is the ISO 27001 system standard, but you should also consider regional data privacy concerns – such as GDPR legislation, CCPA, COPPA, and the EU Model Contract Clauses. This is particularly important for multinational companies which operate in different regional and legislative contexts.
In terms of day-to-day infrastructure and usability, single sign-on ought to be a top priority due to the increased security, accessibility, and productivity it allows. The provider should welcome SLAs on guaranteed uptimes, and anything below 99.5% guaranteed uptime is a red flag.
Support from the experts is key
Transforming your supply chains and minimising your impact on the planet and communities is essential, but by no means easy. The right platform can help, but technology can’t do it alone. Organisations need a team behind their solution to ensure that it is being used to its full potential.
Without this customer support, it risks being another piece of ‘abandonware’ that companies either adopt in piecemeal (and therefore ineffective) fashion, or that they give up on.
Global enterprises spend on software amounted to around $783 billion in 2022, and it hasn’t shown signs of slowing. Yet, McKinsey estimates that 70% of complex, large-scale digital transformation programs don’t reach their stated goals or aren’t fully adopted. Together, this data points to just how much money, as well as the potential efficiencies that technology brings, is wasted.
Businesses who truly want to change need support from sustainability experts who can advise you from the start – about not just the technology, but your sustainability transformation at large too. Solution providers who can offer trainings, workshops, capability building, and change management/transformation programmes alongside their product should be looked upon favourably.
This gives your team and your suppliers and partners the best chance of working together to truly reduce your environmental impacts.