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Sustainable procurement is the order of the day — but how to achieve it? Miguel Cossio, senior director analyst with Gartner, discusses the technology solutions that are available to companies today, and what to expect in the future.
The procurement function is increasingly finding it necessary to imbed sustainability into its operations, Cossio says. The concern ranges across more than just measuring greenhouse gases, instead covering the whole spectrum of environmental, social and governance (ESG) compliance.
Most ESG efforts begin within the four walls of a company, but soon expand to include monitoring of suppliers, to ensure that they, too, are performing against the necessary criteria. But beyond the first tier of suppliers, it’s not easy to identify which vendors are making product for the original equipment manufacturer or retailer — let alone whether they’re adhering to the desired standards. In many cases, Cossio says, the OEM doesn’t even have a clear idea of who its suppliers are at the second tier and beyond.
Technology can help. It starts with the basic imperative to collect key data about suppliers, then extends to taking action based on that information. Technology tools “help you scale your efforts, drive your strategy forward and simplify the work of suppliers submitting information to you,” Cossio says.
There’s no single piece of technology that addresses the full range of sustainability efforts. Most companies will require multiple applications to cover the various tiers and stages of production and distribution. Cossio says they shouldn’t stop at acquiring data about suppliers from outside sources; it’s essential that they also solicit the necessary information directly from those suppliers.
Efforts to obtain sustainability data should emphasize the supplier experience, Cossio stresses. “Focus on adding value to them, how they can use this to take action, and make improvements.”
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