How the 'action staircase' can improve procurement performance

An “action staircase” of procurement practices has been identified to help organisations improvement sustainability credentials.

The staircase was drawn from the results of a survey by the MIT Centre for Transportation and Logistics, which ranked the results from most common to a “peak” of the most rare, to provide a clear journey for procurement teams.

The report said there was an increasing gap between companies’ investments in supply chain sustainability and their stated goals, despite intensifying pressure from investors and corporate buyers to improve sustainability.

“At the bottom of the staircase are the practices most commonly implemented, and at the top are those least so,” the report said. “In general, anyone looking to assess their next supply chain sustainability investment can look at which stair they find themselves on now to see what typically comes next – or which earlier steps their organisation may have overlooked.

“Interestingly, all paths lead upward and are mostly convergent… The ‘peak’ includes initiatives and technologies most firms as yet consider aspirational or those only on the radar of firms that are particularly aggressive about their supply chain sustainability efforts.”

The action staircase:

The peak

Collaboration with NGOs or third parties (12%)

Carbon offsets  (14%)

Third-party verification (18%)

Supplier training (18%)

Supplier benchmarking (22%)

Environmental technologies (24%)

First ascent

Supplier collaboration (26%)

Information technologies (26%)

Standards or certification (31%)

Base camp

Company code of conduct (32%)

Supplier code of conduct (35%)

Supply chain mapping (38%)

Supplier audit (46%)

The report said supplier audit, supply chain mapping, and codes of conduct (company and supplier) were the most prevalent practices, forming a “base camp”. These practices have seen the greatest increase from 2020.

Supplier collaboration, information technologies, and standards or certification represent a “first ascent”.

“At the top of of the staircase are the most rarely applied practices among our respondents, including supplier training, third-party verification, carbon offsets and NGO/third-party collaboration,” said the report.

Danny Shields, vice president for sustainability and risk at supply chain risk management platform Avetta, who contributed to the report, said: “Supply chain management has never held a more critical and influential role in the world than it does today, and organisations are rising to the challenge. To mitigate ongoing supply chain disruptions, the leaders in the space are becoming more conscientious and intentional in their supply chain monitoring. 

“As a result, we’re not only seeing a rise in sustainability tracking, but also a push for evaluating all risks, including ESG, safety, business risk, and much more.”

The survey was conducted globally and received 3,300 responses from professionals across logistics, supply chain, procurement, manufacturing, warehousing, sustainability and other business functions. The research included 15 executive interviews, supported by news and social media content analysis.

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