Procurement has been a key business function for many years now; successfully delivering cost savings and ensuring high quality has been part of the course for decades. In more recent years, Chief Procurement Officers have increasingly spoken of how they can deliver in new areas (the key word to describe these areas being “value”). Sustainability is an area of value to many businesses, where procurement can have an enormous impact, however there is a perceived conflict between cost and sustainability.
Acre's Tom Townsend, Senior Consultant | EMEA, spent time with two leading procurement experts, talking through these areas – he wanted to find out whether procurement is tackling these issues well and whether there was a more fundamental problem with how teams are focused on competing priorities. In order to get a balanced perspective, he spoke with Dave Howson, Procurement Risk & Sustainability Director at Coty to provide a “sustainability perspective”, and Angus McIntosh, former Chief Procurement Officer at Beiersdorf – Angus trains procurement professionals on negotiation.
Tom conducted these interviews before the Covid-19 situation had come to affect us all; since then, he has seen significant upheaval in supply chains across many industries. Some companies (and by extension, procurement functions) have endeavoured to share the burden of these impacts with their suppliers, whilst others have demonstrated more traditional risk avoidance and cost saving behaviours.
Are we rewarding or incentivising good behaviours in procurement?
How can we ensure sustainable behaviours are embedded in the function.
Managing the perceived conflict between cost and sustainability.
The board must decide, do you want a ruthless, brutal, year-on-year milking of savings from suppliers, or investment in the supply chain to ensure sustainable performance? You must have congruence and coherence of objectives.
Procurement traditionally focused on cost and quality – cost and sustainability are often perceived as being in direct conflict.
How do we ensure that procurement professionals are focused on the ‘right’ areas?
Procurement practitioners have historically been targeted and rewarded on cost reductions.
Is this breeding a generation of professionals who are not acting in the best interests of their businesses?
Procurement is an area of the business which can have a real impact.
How can we ensure that sustainability is embedded in the function’s culture and should the responsibility of this sit with the Chief Sustainability Officer of CPO?
Has there been a material shift in the skills required for procurement professionals?
Will we see a shift to where sustainability skills are prioritised over traditional procurement skills?
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