Supporting Procurement’s Shift Towards Sustainable Sourcing

This abstract is taken from the blog, Why It’s Time to Kickstart Your Sustainable Sourcing Strategy.

The Covid-19 pandemic may have initially dampened some organizations' sustainability-oriented procurement plans in favor of vital business cost-saving and other survival measures, but it has also spurred consumers to be more mindful of the effect globalization has had on the spread of the virus.

Within procurement specifically, the pandemic has exposed the vulnerability of having complex, interconnected supply chains, an over-dependence on a specific geographic region and the importance of being resilient with a diverse pool of suppliers to pull from during unforeseen, catastrophic events. More sourcing teams are making the transition from the traditional focus on "lowest-cost model wins" to more strategic award decision-making that might favor minority-owned or more environmentally conscious suppliers.

While there is no one-size-fits-all solution for the transition from sustainability laggard to leader, consumer demand is piling on the pressure for supply chain transparency. Now, as a consequence of awareness around environmental and ethical failings in the fast fashion industry, attention on once sidelined sustainability targets are returning with fervor.

To support that shift, best-in-class offerings like Keelvar are aiding that transition by offering features to help companies analyze multiple awarding scenarios based on those criteria and other constraints. 

?For example, through our  Sourcing Optimizer platform, we can provide insight on how best to award business based upon your constraints and preferences, and you also have the option of giving systematic feedback on bid items to help guide suppliers into compliance on things like transit time or the percentage of recycled material.

Some example scenarios for analyzing sustainable awarding include: 

• Award at least 50% of the business to Smartway Certified carriers
• Award 100% of these select lanes to slow steaming bids 
• Optimize on lowest CO2 possible and compare to the lowest cost possible
• Award as many round-trip lanes as possible to 1 carrier per round trip combination
• Favor recycled material bids by 5%

While much of the past year saw organizations focused heavily on overcoming the challenges brought on by the pandemic, procurement professionals have a unique opportunity to make a significant contribution to positive change through the action taken in the supply chain and lead the way to a better future for all.

For more details on how Keelvar can help transform your sourcing process to favor suppliers that align with your organizations’ sustainability targets, continue reading our blog here.