Sustainable Purchasing: The next frontier of value creation


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Op 15 juni 2010 tijdens de Intercitymeeting, georganiseerd door RC Monnickendam gaf Bart Vos
(NEVI Chair Purchasing Management, Tilburg University) onder de titel " The next frontier of value creation" zijn visie op het onderwerp MVO -Maatschappelijk Verantwoord Ondernemen.

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Sustainable Purchasing: The next frontier of value creation

  1. 1. 1<br />Sustainable Purchasing:The next frontier of value creation<br />Intercity meeting Rotary Clubs Waterland<br />June 15, 2010, Volendam<br /> Bart Vos<br />NEVI Chair Purchasing Management, Tilburg University<br />Expert Partner Coppa Consultancy<br />
  2. 2. McDonald’s. I’mlovingit……<br />2<br />
  3. 3. 3<br />Agenda<br />Context: Supply chain dynamics<br />Sustainable purchasing (SP):<br />What & why?<br />How? Embedding sustainable purchasing in the internal organisation<br />Concluding remarks<br />
  4. 4. 4<br />Context: Supply chain dynamics<br />Increasing focus on chain optimisation <br />  relay race as metaphor<br />Role purchasing? Selection, managing and development of suppliers More important as a result of outsourcing tendency!<br />Ever more performance pressure: faster, better, cheaper<br />And more “challenges” like globalisation, technological progress (ICT!), more demanding customers & growing impact “public opinion”<br />
  5. 5. 5<br />Corporate Social Responsibility<br />What?<br /><ul><li>Triple P value creation:People, Planet & Profit
  6. 6. Multiple ‘Stakeholders’
  7. 7. “Here vs there” & “later vs now”</li></ul>Why?<br /><ul><li>Have to (e.g. laws, regulations)
  8. 8. Ought to (moral/social/ecological principles)
  9. 9. Pays off (e.g. via improved image, differentiate from competitors, positive HRM effect: ‘employer of choice’)</li></li></ul><li>6<br />Sustainable Purchasing: What are we talking about?<br />“Multiple terms”: sustainable purchasing/sourcing, “responsible sourcing”, “green procurement” etc etc<br />Sustainable purchasing (SP):<br /> “Within organisations purchasing function explicitly and structurally pays attention to societal role in a way that 1) goes beyond obligations by law and 2) results in added value for both the company and society (Jeurissen, Nyenrode, 2006)<br />Motto: ”you are and remain responsible for what you purchase/source”<br />
  10. 10. 7<br />Sustainability issues in chains<br /> Environmental issues<br /><ul><li>Hazardous materials
  11. 11. Waste treatment
  12. 12. Efficient energy consumption
  13. 13. Efficient materials usage
  14. 14. Biodiversity</li></ul>Other “ethical” issues<br /><ul><li>Bribery & corruption
  15. 15. Product safety & quality
  16. 16. Animal wellbeing</li></ul>Social issues<br />Child labour<br />Forced labour<br />Non discrimination<br />Right to have trade unions<br />Working hours & overtime<br />Salaries<br />Safe & healthy labour conditions<br />Container topic, trade-offs, strategic priorities<br />
  17. 17. 15 juni 2010<br />
  18. 18. 9<br />Sustainability at Dutch Railways (NS)<br />Corporate Social Responsibility (CSR) clearly on strategic agenda NS<br />Three CSR priorities:<br />Energy savings<br />Noise reduction<br />Waste treatment<br />Purchasing contributes in many ways, for example via:<br />Cleaner fuel<br />Reducing weight of trains<br />Green building<br />Source: Deal!, January – February 2009<br />People, planet, profit criteria used in all NS purchasing decisions<br />
  19. 19. Geluid<br />15 juni 2010<br />
  20. 20. 11<br />Drivers sustainable purchasing<br />Results American research (Carter & Jennings, 2004):<br />True leadership top management<br /><ul><li>Direct significant positive link with SP
  21. 21. Indirect effect: strengthen more ‘human based’ culture</li></ul>Own initiatives individual employees<br />Pressure from customers (e.g. Dutch government!!)<br /><ul><li>Challenge purchasing is to integrate these market demands in its supplier management</li></li></ul><li>12<br />Planet Me at TNT<br />TNT’s ambition behind Planet Me: become the first zero emission mail and express delivery company<br />Idea: combine corporate activities & individual actions<br />Planet Me is a three-pronged approach to radically reduce CO2 emissions:<br />Count Carbon: Report about Carbon footprint<br />Code Orange: Reduce CO2 emission in TNT operations<br />Choose Orange: Encourage employees (globally about 160.000) to take action ‘to save the planet’<br />Source: Website<br />
  22. 22. New, sustainable HQ TNT<br />13<br />
  23. 23. 14<br />Why sustainable purchasing?<br />Not only because should or ought to, but also<br />because it can be very rewarding:<br />Risk management (more “defensive”)<br />Sales increases and/or cost reduction<br /> (more “offensive/pro-active”)<br />
  24. 24. Innovation via Sustainable Purchasing<br />
  25. 25. 16<br />How to get it done?Embedding SP internally (1)<br />Stimulate<br />Clear basic values/principles organisation (vision/mission)<br />Human resource policies (e.g. include in “profile” for recruitment & selection, training, reward system)<br />Facilitate<br />Report achieved results, e.g. via Sustainability Reports<br />Ongoing dialogue with stakeholders (internal & external), e.g. about social & environmental criteria in specifications<br />
  26. 26. CO2 uitstoot in TNT’s keten<br />Source: TNT annual report 2009<br />
  27. 27. 18<br />How to get it done?Embedding SP internally (2)<br />Control/monitor<br />Codes of conduct: internally and for suppliers (e.g. Heineken, Unilever, Philips, AkzoNobel)<br />Risk analysis in the supply chain/network<br />Audits (e.g. SOCAM for C&A)<br />Ethical office (sort of “faith person”)<br />Clear and consistent sanction policy<br />
  28. 28. 19<br />Concluding remarks<br />True leadershiptop management as critical success factor<br />Purchasing challenge? Align with and contribute to corporate CSR/sustainability initiatives<br />Sustainable purchasing essentials:<br />rewarding, cooperation, job enrichment<br />Hype?!? Could be, yet very unlikely:<br />Increasing public opinion “pressure”<br />Ambitious SP targets Dutch government<br />Many leading companies active in sustainability domain<br />
  29. 29. VBDO Responsible Supply Chain Management Award 2009<br />Philips 90 <br />Akzo Nobel 87<br />Unilever 79<br />Reed Elsevier 75<br />DSM 73<br />Ahold 60<br />ASML 60<br />
  30. 30. 21<br />Motto: De Vonk<br />Het vuur moet blijven branden<br />En de hoop mag niet vergaan<br />En de geest moet kunnen waaien<br />Want de vonk, de vonk kan overslaan!<br />Van Nieuwegein tot Oldebroek ……<br />En als ze morgen bellen,<br />Zijn we er overmorgen weer<br />De Dijk, De Blauwe Schuit (1994)<br />