Procuring for impact by leveraging your buying power

SBC’s Thriving Voices online event series for FY2024 concluded last week with our kaputī kōrero focusing on how to procure for impact with a deep dive on supplier diversification.?

Our 2023 flagship report?‘Thriving People – Strengthening the ‘S’ in ESG’?showed business has an exciting role to progress social equity through action in three areas of focus, including supply chain management.

Social procurement, supplier diversity, sustainable purchasing - whatever you call it or the tactics you deploy, leveraging your supply chains to create impact is now good practice, but it is not without its challenges. Getting the foundations right is a must!

So it was fantastic to have The ākina Foundation ’s Rochelle Wallens , Air New Zealand ’s Roland Mitchell and WSP in New Zealand’s Ineke Brockie join me in conversation where we delved into the concept of ‘impact procurement’ and what that entails, what ‘good practice’ looks like, and the practical steps a business can take to implement an impact procurement strategy that delivers better outcomes for people, business and our environment.

Rochelle set the scene by defining what the term ‘impact procurement’ means, the building blocks on which good practice can be built, and while the task is not small, its potential value is significant as the total NZ business spend is $630bn annually.

Check out this snippet from Rochelle’s introduction below.

Put simply, social procurement is about creating more value from the purchase of goods, services and works, whether that value is environmental, social or cultural.? By integrating these considerations into procurement strategies, organisations not only meet their operational needs but also contribute positively to broader societal goals.

?It was great to hear Roland Mitchell (Air New Zealand’s Procurement Manager) and Ineke Brockie (WSP’s Head of Procurement) provide a business perspective on how best to establish effective supplier diversity programmes. Air NZ and WSP are very different businesses, operating very different procurement models in different sectors, but there were clear commonalities in how they’re implementing their programmes and unlocking opportunities for Māori and Pasifika businesses, as well as social enterprises.

Check out this snippet from Roland’s presentation when he talked about the importance for build reliable data.

Finally, watch through this excerpt from Ineke’s high level overview of WSP’s Three year supplier diversity roadmap.

Here are my four takeaways, which were common themes shared by all three presenters:?

1. ‘Just get started’ but be purposeful. Understand the opportunity by getting clear about what is important to your organisation and what you're trying to achieve. Also, consider the societal issues that matter most to your business and the sector you operate in.
2. Build supply chain visibility and reliable data. Work with internal stakeholders to analyse and build your understanding about what goods and services are being purchased (spend categories) across the organisation (analyse current and forecasted spend) and across categories. Start building a picture of how you spend that money, i.e. how much do you spend locally? Consider both direct suppliers and their suppliers. This will help you identify good opportunities for social procurement.
3. Good practice places a strong emphasis on engaging with internal stakeholders and building meaningful relationships with vendors and suppliers to firstly ensure they understand and fully buy-in to the importance and value of social procurement. Secondly, to build capacity and capability - for example by improving the visibility of your procurement pipeline, making sure diverse suppliers are included in the procurement process, and to make it easier for diverse supplier to do business with your organisation. And thirdly, by working with intermediary partners such as ākina (for Social Enterprise), Amotai (for Māori and Pasifika businesses) and Whāriki (for Māori businesses) to connect with, create new opportunities for diverse suppliers from traditionally disadvantaged or underrepresented groups, as well as building market capability, [NS1]?while at the same time developing more resilient supply chains and reducing risk
4. Targets setting. It’s critical to targets for both spend and engagement with diverse suppliers beyond your existing supply base. This helps drive your organisation to understand its procurement spend and to engage and create more opportunities and benefits for more diverse suppliers rather than simply funneling more spend through existing suppliers.

?Want more information? Check out this practical guide:

• Social Procurement in practice - A guide for social procurement in Taranaki

These were the three intermediary partners mentioned during the presentations:

• ākina for Social Enterprise, and building organisational capability in Impact Procurement and Measurement.
• Amotai for Māori and Pasifika businesses.
• Whāriki for Māori businesses.