Organisations must support both large suppliers and SMEs to ensure sustainability and risk management are implemented throughout supply chains.
Melanie Davies, global sourcing and compliance leader at GE Aviation Systems, said while suppliers tended to be on board with the idea of sustainability, many did not know how to go about implementing sustainable practices in their operations.
Speaking at the CIPS Breakfast Briefing on Managing Risk in Procurement and Supply, Davies said as a large organisation it’s important to support suppliers, whether large suppliers or SMEs, through this process.
She said: “When they've come to us asking for help, that's easy because we can then share some of the tactical plans that we've put in place on our own sites with them. For example, have they done a walkthrough of the facility but looked at energy consumption, instead of how clean their factory floor is? We've been able to help in those cases.”
Davies said it was harder to manage situations in which suppliers “have the idea that sustainability is something that somebody else has to do”.
“In those cases, it is more difficult to reach out to them because there isn't that awareness that there are things that they can do locally.”
Also speaking at the event, Claire Marsden, head of supplier relationship management at the Department for Environment, Food and Rural Affairs (Defra), noted the importance of working with suppliers on sustainability and risk.
Marsden said over 70% of Defra’s impacts are in the supply chain, which gives the organisation an imperative to ensure sustainability and risks are built into contracts.
“We absolutely make sustainability a part of the way in which we work. That's right from the point of which we're making business decisions about options for projects or options for contracts, and all the way through, understanding the risks and putting it into contracts.”
As a government body, Defra can be “information heavy” and put a lot of requirements onto its supply chain, which is something important to consider when looking to work with SMEs, Marsden added.
“One of the things that we try to do is to make sure that where we need to put contracts in place in particular markets, as part of our category strategies, we are identifying where we will be either targeting the SME community, or where we're likely to get tenders and bids in from the SME community.
“We must have a good understanding of what that means in terms of the data that we need and we're going to require through the contract, but also through the specification, and being really clear about what it is that we want.
“In some cases that might mean being prescriptive. In other cases where we think there's opportunities for innovation, asking them [suppliers] to come to us with solutions,” she added.
“We have to work with SMEs and support them to really understand some of the simple things that they can do in their own business. This applies to some of our larger suppliers as well, and working with them to really understand the impacts and then target those.”
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