Challenges in Sustainability Faced by Procurement Teams
Adopting sustainability in procurement has many challenges that the procurement team must address to aim for sustainability. However, what are these challenges?
In this article, we will discuss what sustainable procurement is. We will tell you the role of the procurement team in achieving sustainability in procurement. Additionally, we will show you the challenges that many procurement teams face when adopting sustainability in their procurement.
Once you are done reading this article, you will know how crucial it is for procurement teams to address and combat these challenges that they may face in procurement. Thus, it will enable you to have robust sustainable procurement processes.
Sustainable Procurement
Sustainable procurement refers to the incorporation of the planet, people, and profit pillars of sustainability into the procurement process.
It refers to the acquisition of goods and services in an environmentally-friendly manner to fulfill the needs of the company for its daily operation.
It involves selecting suppliers that meet the sustainable criteria or standards of your company, with the goal of promoting sustainable development and reducing negative environmental and social impacts.
Sustainability in procurement ensures that the sustainable values of a company are upheld throughout the product and service life cycle.
Furthermore, using new technology in sustainable procurement is crucial to achieving sustainability within your business operations. By integrating new technologies, the company can promote sustainable development and minimize the negative impacts of the procurement process and other business operations.
The Role of Procurement Teams to Achieve Sustainability in Procurement
Before we tell you the role of a procurement team in achieving sustainability in procurement, we must first discuss what it is.
The procurement team refers to a group of professionals that supervises the acquisition of goods and services needed by the company for its daily operation. It is responsible for managing the procurement process and monitoring expenditures throughout the whole project lifecycle.
Now that we know what it is, we are now going to tackle their crucial role in achieving sustainability in procurement. Here are some ways how they can contribute to sustainable procurement:
1. Setting sustainability goals
The procurement team can work with other departments of the company to set sustainability goals in their procurement activities.
These goals may include the reduction of carbon emissions, sourcing sustainable products, engaging with sustainable suppliers, and reduction of waste.
2. Selecting suppliers
Procurement teams can help the business to achieve sustainability in procurement by evaluating the environmental and social impact of potential suppliers before selecting them.
This may include evaluating the supplier’s sustainability policies, adherence to labor standards, ethical business practices, and how they create their products.
3. Managing Contracts
Procurement teams can help by including sustainability requirements in contracts with suppliers. This will ensure that the suppliers that the procurement team has selected comply with all the environmental and social standards.
4. Monitor sustainability performance
Procurement teams must track and report on their sustainability performance to know what areas to improve. Additionally, this demonstrates their commitment to achieving sustainability in procurement.
Procurement teams do not just procure products. They must ensure that all activities in their procurement process comply with their sustainable requirements to ensure that they are still on track to achieving sustainability.
By incorporating sustainability considerations within their procurement processes, procurement teams can help the business to reduce its negative environmental impact, foster ethical business practices, and build long-term value for all stakeholders.
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Challenges Faced by Procurement Teams in Sustainability
In my time as a procurement manager, I faced all challenges. In general, for companies and procurement managers, when sustainability is not in the core DNA of the business, the main question when it comes to procuring more sustainability is: how can we take care of our planet and our future generations better, without losing any margin? However, we will focus for now on the overview of the challenges faced by procurement teams.
1. Lack of knowledge about sustainability
The lack of understanding about sustainability practices in procurement processes is one issue that procurement professionals must deal with. This can occur at any level of the business, from stakeholders who are doubtful of the benefits of sustainable buying to procurement manager teams that do not know where and when to start.
Managers who lack awareness may also struggle to determine how to source resources sustainably or how to assess how environmentally friendly their present procedure is.
The best thing you can do when dealing with a lack of sustainability understanding is to support education and training programs that will educate your team about the value and method of sustainable procurement.
2. Limited support from suppliers
Your teams will need to evaluate and rate the sustainability of your suppliers in addition to your own efforts to achieve a fully sustainable procurement procedure.
Since suppliers are independent entities, they can have different values or resources, and they might not be receptive to trying something new.
3. Lack of government funding
I am sure that many of you might be working with international suppliers. Your experience could vary from nation to nation. Many external elements, such as government funding, cultural support, or even politics, might pose difficulties for sustainable procurement.
In addition, they can also play an important role in deciding how sustainability looks at your organization. Some cultures might be more accepting of sustainability initiatives than others, and they might have stronger political and governmental support for promoting eco-friendly practices.
4. Higher costs
Many procurement departments and businesses are concerned about the cost of transitioning to a new procedure when attempting to use a more sustainable form of procurement.
Almost 38% of businesses experienced cost hikes after making the switch to sustainable buying. However, you must consider it as an investment for the future of your business and the world when thinking about making the switch to sustainable buying practices.
5. Getting the right technology
You might discover that for you to effectively make your efforts environmentally friendly, you will need to have a distinct set of tools or technology when seeking to make the procurement process more sustainable.
Implementing new technologies might be challenging depending on finance and higher-level internal support.
Nevertheless, this can equip you and your group with specialized knowledge that will maximize your efforts in sustainable procurement and help you develop your career.
Do you want to learn more about how to address these challenges in sustainable procurement? Then try our Sustainable Procurement Course. Our course will teach you how to face these challenges and how you can achieve sustainability in your procurement process efficiently. Enroll now!
Frequentlyasked questions
+ What is sustainable procurement?
It refers to the acquisition of goods and services in an environmentally-friendly manner to fulfill the needs of the company for its daily operation.
+ What is a procurement team?
It refers to a group of professionals that supervises the acquisition of goods and services needed by the company for its daily operation.
+ How can procurement teams contribute to achieving sustainable procurement?
Procurement teams can contribute by setting sustainability goals, selecting sustainable suppliers, managing contracts, and monitoring their sustainability performance.
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