With the world being made smaller through online communications, ideas and principles are becoming more universal. One of these lines of thought is sustainability, and in today's society, sustainability is at the forefront of everyone's agenda. With procurement software, you can ensure your purchasing is in line with this shared principle.
Sustainability is a concept that advocates that one should be mindful of their actions and the consequences of such actions on social, economic, and environmental landscapes. Sustainable purchasing is concerned with how you streamline your purchasing to contribute to the growth of communities, economies, and environments.
Using modern procurement software can help your business to realize sustainable purchasing and effective spending management for every procurement cycle through the following:
- Pinpoint opportunities within your procurement management process that can impact sustainability
- Analyze your principles and the avenues that push forward your belief system
- Measure your performance and actions taken
- Communicate your work to push forward the message
According to the World Economic Forum, "We are in the middle of a paradigm shift. Consumer pressure, fueled by social media, is driving commercial organizations to do more than pay lip-service to the global socioenvironmental impact of their supply chains." With the best procurement software, your company can grow and maintain its competitive advantages while implementing sustainable purchasing practices.
Below we will look at some features of procurement management software that allow companies to pinpoint, analyze, measure, automate and communicate their activities toward sustainable purchasing.
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Procurement software makes your procurement activities more sophisticated while also streamlining the process. This is a solution that helps businesses gain greater visibility, better networking across departments, and stronger collaboration with stakeholders within and outside of their organization.
These aspects of sophisticated purchasing allow for the creation of processes that ensure sustainability while helping your business manage the intricacies involved. A procurement suite limits waste, allowing your business to realize sustainable purchasing while achieving cost efficiency across procurement departments.
A cloud-based procurement solution encourages process improvement to advance efforts in sustainable purchasing. The software enables this through easy-to-use collaborative tools such as purchase requisition systems where departments can combine needs and orders collectively, messaging systems to communicate in real-time, spend management solutions, and approval workflows. When you leverage all these new procurement tools, your team can contribute to sustainable purchasing by:
- Combining orders to reduce order frequency and simplify order management
- Set order thresholds, so you're not ordering low quantities
- All orders are done virtually to avoid paper waste
- Purchase optimal quantities to ensure you are not ordering too much
A unified purchase order software can help make these items a priority. Doing so can reduce your supply chain waste by making it a more efficient operation and ordering at more optimal levels.
A procurement solution produces sustainable purchasing in this manner by controlling order frequency. It decreases non-ideal shipment capacities and ensures your organization is ordering to support the least amount of transportation possible. By reducing transportation needs, you encourage cost savings while also reducing fuel emissions, causing less traffic and reducing the need for equipment required for goods transportation.
With a procurement system, end-to-end procurement is processed and done through electronic transactions. This reduces the need for paper, which is a huge effort in sustainable purchasing.
In one case study, Fetchr, a delivery service app provider and delivery service, was able to reduce piles of paper waste by implementing unified procurement software. You can read how they benefited from the software here.
With the requisition, ordering, and procurement tools offered by an e-procurement platform, you can pinpoint your ordering frequency and levels, analyze if you are ordering sustainably, measure the impacts of your ordering processes, and communicate with stakeholders the reason and impact of the process change.
A procurement and sourcing platform should also double as a supplier management tool or supply chain management system. This entails managing the list of suppliers and everything that concerns that supplier within your entire procurement process. You want to ensure the partners you purchase from move the sustainable purchasing vision forward.
If you are upholding the principles of sustainable purchasing forward and actively spreading this message, you must find the best procurement partner that follows the same principles.
Evaluate vendors to procure supplies from
The vendor management feature of procurement platforms can help by evaluating suppliers based on your expectations. Typically, the software will have scorecards that help identify suppliers who should be reused or never used. You can quickly build a database of approved suppliers for your team with comprehensive details about your partners as documented by the software.
This ensures that your procurement team only purchases from approved suppliers. Your staff can also complete updates on the supplier's list to ensure all records are up to date and keep comprehensive documentation of interactions with suppliers.
These features for managing suppliers help companies do their due diligence on their partners at all times to ensure they follow your guidelines regarding sustainable purchasing.
According to the United States Environmental Protection Agency (EPA), "It's important to be aware that some companies or organizations will sometimes make inaccurate claims which make their products or services seem more environmentally preferable than they really are. This process is known as 'greenwashing.' To better navigate the marketplace, look for credible ecolabels and standards and ensure all claims are verified by a third party certifier or meet the Federal Trade Commission's Guides to the Use of Environmental Marketing Claims." The supplier management feature of your purchasing software can help with this issue.
Within the software, you can apply and upload all necessary documentation associated with that supplier. You can import certifications, licenses, and other official documentation to ensure your partners are on the up and up.
You can also create, manage and upload contracts within the procurement software. The contract management features help to establish audits and controls to reduce the risk of dealing with unethical partners who do not share your same commitment to sustainability.
Manage and Find Alternatives
You can also keep a record of other options for items amongst a list of suppliers in case an issue arises. Raw materials and components can easily be found in the supplier management software tool in case you need to source an alternative. The software also allows you to customize your list with categories and subcategories to make finding appropriate suppliers even easier within the software.
You can also put in sections or categories for local suppliers within a software that lets you manage sourcing and procurement. By purchasing locally, you are reducing transportation time and emissions from the point of production and point of delivery. Also, you are supporting your local communities by putting money back into where you are doing business.
A procurement software platform can push your commitment to sustainable purchasing through supplier management software features. The software allows you to demonstrate your dedication to sustainable purchasing by using your influence on your partners. The software will allow you to form strong partnerships that nurture sustainable operations.
For help on how e-procurement software can evaluate suppliers, you can click here.
With the supplier management features in a procurement management system, you can pinpoint the suppliers you would potentially want to do business with, analyze if they are dedicated to pushing sustainability forward, measure their commitment to the cause, and communicate with them to hold them accountable to your level of commitment of sustainability.
DATA MANAGEMENT & VISIBILITY
More than just inventory management, an essential part of your procurement operation is data management, and procurement solution helps with that. It allows for visibility so you can trace data and analytics all the way to the transactions at the item level when you procure supplies. With this level of data and detail, you get more visibility and control over data that you can leverage to make more informed decisions about sustainable purchasing.
Having digital versions of data and catalogs using one unified procurement system reduces the need for paper documentation while also increasing the ease of finding the necessary information when needed. This easy-to-use data management system contributes to sustainable purchasing by reducing waste. It also makes it easier to carry out spending analytics based on available data.
Seeing the flow of purchasing within the software is integral in maintaining a sustainable purchasing process. To satisfy stakeholders, you should be able to present justification for purchases of items. Such things can include:
- Ensure purchases of items made from recycled material
- Buy non-hazardous products
- Look for organic components
- Origin, safety, and authenticity of products
In an easy-to-use procurement software, the ability to create master lists of items and organize and categorize them can ensure you are purchasing according to sustainable requirements. A procurement solution that helps you add structure and documentation lets you control and adjust your purchasing behavior while ensuring proactive spend management.
Scot Case, in one of his Walmart Sponsored Series on the Triple Pundit, said, "Sustainable purchasing is based on the simple concept that every single purchase has hidden human health, environmental, and social impacts and that it is possible to reduce adverse impacts by buying better products." Utilizing data management solutions within your procurement automation tool allows you to track and censure what you are buying accordingly.
Using procurement software that helps you manage your data affords the transparency you need to attain sustainable purchasing. This transparency can help in process improvement and provide any documentation needed to satisfy any inquiries into your organization.
You can see how using IT procurement software will help transform your business here. With IT procurement software, you can efficiently pinpoint data points, analyze your operation through customizable reports, measure your progress over time, and communicate all necessary information to your partners all from one software.
A procurement solution, through its features of requisition and ordering as well as supplier and data management, enables your organization to move towards sustainable purchasing.
The different features procurement tools built into one software allow you to pinpoint areas of opportunity, analyze your current position, implement measures for spend management and measure your performance, and communicate with partners your vision.
Sustainable purchasing has the added benefit of cost reduction and driving profitability. As you work within the procurement software to reduce waste and make items more efficient, you are also increasing your bottom line.
The Sustainable Purchasing Leadership Council said it best, "Sustainable purchasing put simply, is core business, for every organization. And since the majority of organizational impact occurs deep in supply chains, transformational change requires that all organizations, regardless of size or sector, harness the power of procurement to reduce their impact." IT procurement software is the key to this transformational change towards sustainable purchasing.