Communication is Key, as is Collaboration instead of Compliance

Procurement organizations are or should be at the heart of a company’s sustainability strategy. And that in turn means working closely with suppliers on sustainably goals and practices.

Supply Chain Digest Says...   “I think people resisting is not really an option. But I also think unrealistic expectations are not an option either,” Barry said. What do you say? Click here to send us your comments   Click here to see reader feedback

“It’s an essential step on the road to a low-carbon future and, if successful, companies can work together with their suppliers to reduce carbon emissions on a far greater scale across the whole value chain,” writes Shardell Joseph in a column on the UK’s SupplyManagement.com web site.

How to successfully embark on such a journey? It all starts with trust, Joseph says. He includes comments from Oxfam head of ethics Sophie Brill. who says “Building open and trusting relationships is key to making progress in this work,” adding that “Your suppliers need to know they can talk about the difficult issues they are facing, and that you will collaborate on solutions that are in the best interests of the people affected.”

The next recommendation: Be clear when you have “the talk” with suppliers.

Companies can benefit from viewing the discussion on sustainability as a way to better understand your company’s supply chain,

“If you know where your pieces come from and where your products go, you’re going to be able to negotiate ways that mean all sides can win,” James Berry, an associate professor in organizational behavior at the University College London, tells Joseph.

It’s also important to take a direct approach on tough issues to establish trust and transparency. For example, suppliers will want to know what their return on investment will be if they start to make efforts on sustainability.

Berry says he regularly discusses contingency contracts with clients. “This means if we can deliver our product in a sustainable way to these metrics, you will pay this. If we can’t meet those metrics, then you will pay this.”

This approach allow companies to layer different options into a single deal.

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It’s also a mistake, the article says, to take a “compliance” posture with suppliers and sustainability. That’s in part because some suppliers will need to respond to multiple different requests from different customers, making it difficult for them to formulate an overall plan.

Goals also have to be realistic. Process and material change take time.

“I think people resisting is not really an option. But I also think unrealistic expectations are not an option either,” Barry told Joseph. “You’re going to harm a lot of a lot of groups if you dictate ‘we want this, go do it’. You have to give lead time, because change takes time, and it takes money,” he added.

Brill agreed, adding companies should “have these conversations with a mindset where we are seeking to both hold true to our core values and expectations, but to also learn from suppliers about the practicalities of implementation.”

In conclusion, Joseph says “Organizations that are good at sustainability are those that see their supply chain as an extension of themselves, and the company-supplier relationship will be a transparent partnership with a foundation of solidarity.

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