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Managing sustainable initiatives

Andy Cocks | Jan. 30, 2012
Building sustainability into your supply chain through e-procurement.

Sustainability has become a critical component in corporate and government sourcing strategies.

This is because one of the first steps to be taken towards becoming a sustainable business is changing the way an organisation purchases through its supply chain, as well as the products and services it buys. But sustainability is more than reducing the impact on the environment - it's also about maximising longevity in the market, recognising that factors such as higher energy costs and taxes will raise the cost of operations in the long term.

The checklist of e-procurement best practices below will shed light on how you can reduce environmental waste by implementing and managing your sustainable purchasing programme. Even if you don't have an e-procurement system in place yet, here are the few steps you can take to leverage the same best practices to benefit your sustainable procurement initiative. 

1.       Centralised procurement governance

Centralised procurement governance is critical to the success and deployment of your sustainable procurement initiative. e-Procurement can help by providing a central hub for disseminating information, enforcing preferred supplier and product purchases, and maintaining visibility and control over the whole supply chain.

By incorporating negotiated price lists from preferred suppliers and/or approved sustainable products and utilising automated workflow approval, your e-procurement system will help you educate and enforce sustainable procurement policy to all business units quickly and efficiently.

2.       Automated processes/workflow

One of the biggest challenges an organisation faces when implementing sustainable procurement is in training every employee involved in the procurement process to ensure that the preferred, sustainable products are being purchased.

By capitalising on automated workflow approval process capabilities available in most e-procurement systems, you're able to better manage and monitor a sustainable procurement policy. You can set up parameters for management to be notified when 'non-sustainable' or non-preferred products are being requisitioned, reducing incidences of rogue purchasing.

3.       Integration with contract compliance and finance, invoice integration and online credit card transactions

By integrating your e-procurement system with back-office functions, such as compliance and finance, and the corresponding systems such as ERP and CRM systems, you can initiate a paperless internal workflow. This will not only reduce a lot of manual effort, but save greatly on the amount of printed documents circulated in your office.

Another contributor to paper savings is invoice integration. If your supplier is able to integrate its invoice system with your e-procurement system, then invoices should automatically be generated from purchase orders, which in turn should be generated from the quote. This will ultimately result in less potential for error and less paperwork.

A third contributor to paper savings is online credit card transactions, or the use of P-cards. The remittance of payment electronically via a credit card not only speeds up the purchasing process, but alleviates the need for invoices to be created or cheques to be cut.

 

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