Procurement and supply chain
In this guest blog, Sustainable Procurement Ambassador Rob Alexander outlines the key challenges facing procurement professionals in an ever-changing work environment.
The daunting task for those ‘buying’ products and services
Across the breakfast table, at work, and on holiday we are seeing signs of the world changing. We are being challenged to do our bit to help make the world a more sustainable place for generations to come. Are we moving fast enough – that can be debated, but the most important thing we can do, is take some action today. As procurement professionals it is daunting to know where to start. If you are in a large corporate you may be lucky to have the infrastructure and resources to help you get started and create some momentum. However, many of us are working for small businesses or as sole traders, with limited time and resources, but an in-built desire to do something good.
Tackling a Request for Proposal (RFP) or Request for a Quote (RFQ)
When writing a RFP there are three main things you need to think about
1. You need to understand the market. That is, you need to know which suppliers might be able to supply the product or service? It makes sense to have an introductory discussion with them to understand their capabilities and get their ideas. Do they have ethical procurement processes? How does their company cover subjects such as Modern Slavery, Sustainability, Bribery? Build up a supplier map so when you send out a RFP you know who to send it to. Do not share your budget or thoughts around costs at this stage.
2. You need to be clear on what you want – your requirements. Do you have a specification for the product you want to buy? Can you define what you want the service to deliver – the outcomes? Do you know when you need the product/service? How many? In what format? When do you want to pay for the items? Is there any IPR involved and who should own that?
All of these requirements are simple and expected. However, the area of sustainability and ethical trading can be overlooked – so you need to ask specific questions; What is your company’s position on Modern Slavery? Do you have an Ethics Policy? How is your company embracing the Sustainability Agenda? Are you working towards any of the Science Based Targets for Sustainability?
If so which ones, and what progress have you made? Ask the suppliers to sign up to your own Ethical trading Policy (if you have one) or include clauses in the contract that mandate ethical practices – see below ‘The Chancery Lane Project’. Do you want the supplier to accept your Terms and Conditions, if so, include them in the RFP as a requirement that they agree to them when they submit their pricing. Set the criteria for evaluating the responses to the RFP upfront. Weighting is given for Price, Quality, Cultural fit, and other elements. It is becoming more common to add in 10-30% weighting based on the suppliers responses to your sustainability questions. The weighting will be dependant on your company’s aspiration, and also the type of product or service you are buying. It is always good practice to agree this weighting with a cross functional group that are connected to the service or product that you are buying.
3. Be transparent and fair. You are running an RFP process to try and create a level playing field where suppliers believe they are all being treated in the same way. Don’t provide additional information to one supplier and not another. If there are questions from suppliers, you should create a Q&A sheet which you share with all suppliers so they have the same information. If a supplier asks for an extension to the response date, make sure you communicated any extension to all suppliers. Be ethical, transparent and fair.
The Sustainability agenda is evolving. Very few companies can say they have the answers for all sustainability questions. We need to learn and innovate together. There are two organisations that could help you get started. The first is The Chancery Lane Project. This organisation has prepared many of the legal clauses you need embed into your supplier contracts and RFPs to help deliver climate solutions.
The Chancery Lane Project (TCLP) is a collaborative effort of legal professionals from around the world whose vision is a world where every contract enables solutions to climate change.
- Collaboratively they create new, practical contractual clauses ready to incorporate into law firm precedents and commercial agreements to deliver climate solutions.
- They then work with lawyers to ensure effective and impactful implementation of the clauses, across industries, practice areas and jurisdictions.
- They have launched a Net Zero Toolkit, a collection of clauses and tools which enable lawyers to align their work with a decarbonised economy, and a safe and habitable planet for us all.
The second organisation is the Sustainable Procurement Pledge. This is a non-for profit Global group of procurement professionals that have teamed up to develop solutions and answers to the sustainability agenda, with the aim to solve once, and then apply everywhere. They have some great information, and a fabulous network of people wanting to make a difference and willing to help other professionals.
SPP Purpose We are Procurement. Sustainability in supply chains is our responsibility. We will build a sustainable future for people and our planet.
SPP Vision All supply chains across the world have embedded sustainable procurement practices by 2030.