Company Outlines Ways in Which Procurement Can Spearhead Corporate Sustainability Efforts and Deliver Bottom-Line Results
SUNNYVALE, Calif.--With companies eager to adapt to a new era of customer needs, regulations and competitive realities, green sourcing has become tantamount to ensuring that goods and services maintain high environmental standards while maximizing revenue potential. But going green isn’t easy. Ariba, Inc. (NASDAQ:ARBA), the leading spend management solutions provider, today issued a list of ten tips designed to help global organizations jump start their efforts and deliver results.
“The green sourcing wave has begun to roll,” said Kris Colby, a senior manager in the Spend Management Services group at Ariba, Inc. “Far from a feel-good fad, green sourcing is fast emerging as a key business imperative that can deliver bottom-line results. Closely aligned with the foundations and best practices of strategic sourcing, green sourcing is all about understanding your spend, proactively managing your suppliers, and making sure that your organization's priorities are accurately reflected in every dollar you spend.”
To help companies quickly develop a greener approach to sourcing and supply chain management with minimal investment, Ariba offers the following best practices:
1. Know where you stand: Understanding your organization's spend, supply chain and consumption patterns is the first step because you can't affect what you can't see. A simple assessment of your organization’s “green” status of a more detailed carbon footprint study will provide you with the information you need to determine how well your supply chain is positioned for the changes on the horizon.
2. Have a plan: Once you know where you stand, create a set of goals and, even more important, metrics that can be used to track progress against these goals.
3. Have a single point of accountability: Many organizations have appointed "chief sustainability officers" to oversee their green efforts. The appropriateness of this specific position will depend on your organization and industry, but the key is to have a single point of accountability empowered to effect change.
4. Market your progress internally and externally: Half the battle is getting the word out and bringing people on board. Be sure to communicate to all levels why green efforts are being undertaken, what will be measured and how the company is going to get there.
5. Incorporate "green" into your existing sourcing and procurement processes: Sourcing and procurement have always been about more than just price. Be sure to include green criteria in your requests for proposals (RFPs) and create clear metrics for measuring them as part of supplier performance management.
6. Communicate your goals and standards to your supplier community: By setting clear expectations of your supply base during the sourcing process and proactively monitoring compliance/progress, you can quickly improve your sustainability performance. Outline what suppliers will be expected to provide and how they will be measured to ensure that they are delivering and putting in place the processes and procedures to drive compliance.
7. Stay up-to-date with global regulations: Environmental regulations such as the Restriction of Hazardous Substances (RoHS) directive in the European Union will increasingly affect how your supply chain functions regardless of your location. You need a method for keeping up with changes in this rapidly evolving area to avoid costly mistakes in your supply chain.
8. Keep up with new materials, technologies and processes: Significant work is being done to develop new approaches that can cost-effectively address the challenges and opportunities that green initiatives present. Stay up-to-date in your industry, participate in trade groups and do whatever it takes to maintain your competitive advantage and not be left behind.
9. Do the "easy stuff" first: You don't need to overhaul your supply chain to see gains from sustainability efforts. Instead, identify "quick wins" such as simple improvements in energy efficiency that can both deliver bottom-line results and kick-start your green initiative.
10. Get everyone involved: As with any broad initiative, it is nearly impossible for just one functional area to have an impact on the entire organization through its efforts alone. To be effective, get Engineering, Design, Sales, Finance, Operations and everyone else involved.
“Driving corporate sustainability requires time and effort,” Colby said. “But by taking these actions, procurement can get the process started and begin moving toward realizing results.”
For a more detailed discussion of these and other tips for greening global supply chains, tune in to Ariba’s podcast on the topic at www.sdcexec.com
About Ariba, Inc.
Ariba, Inc. is the leading provider of spend management solutions to help companies realize rapid and sustainable bottom line results. Successful companies around the world in every industry use Ariba Spend Management™ software and services. Ariba can be contacted in the U.S. at 1.650.390.1000 or at www.ariba.com.
