In the next 50 years climate change will alter the way we live. The planet will start running out of oil and the world’s population will increase by 50 per cent. If we don’t act now, we will be stacking up problems for our children and grandchildren that will make the credit crunch and oil spill in the Gulf of Mexico look like the teddy bears’ picnic.
Many of the solutions to these problems lie in our supply chains, and procurement professionals need to innovate to rise to this challenge. But with some notable exceptions we don’t tend to do this. Why is that – and what can we do?
I recently hosted a Dragons’ Den
-style event we’re calling Green Dragons, where CPOs scrutinise the offers of innovative sustainable suppliers. It became obvious that buyers need products and services that are very close to market to consider them seriously. This means there is a big disconnect between front-line buyers and inventors. These new supply chains need nurturing but in these highly competitive days it is not possible to do this resource-intensive and risky activity. Perhaps it’s time for a collaborative approach between buying organisations to develop sustainable supply chains together.
Hindsight is a wonderful thing. I was talking to a director of a large property business that installs biomass boilers and sophisticated building management systems into new builds and retrofits. The problem is that the business can’t find fuel for the boilers or companies to maintain the systems. Given that it takes two or three years to develop a new building it would not be unreasonable to develop a supply chain to support its operation.
When I worked at BAA I was guilty of the same thing. Heathrow Terminal 5 should have had HFC-free chillers but just before they were bought the engineers rejected them because they had no idea how to maintain them. This conversation could have taken place several years before, and this drives me to ensure London 2012 does not make the same mistakes.
Another problem is buyers and inventors do not speak the same language. Purchasers need to have a quick understanding of the business benefits of the product or service. People with a more scientific background tend to present the full story. Independent appraisal of goods may be beneficial but this can be costly.
A senior buyer I spoke to recently was enthusiastic about meeting potential suppliers but added: “Of course we would expect to see a reliable track record for the product.” But if something has a track record it’s not innovative. Purchasing innovation requires an appetite for risk. If your organisation is risk-averse it’s best not to get involved.
Shaun McCarthy is chairman of the Commission for a Sustainable London 2012 and is also director of Action Sustainability. He is now a regular SM blogger so watch out for more about sustainability here on SM's Buyography.