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Supply Management

(CUSCM208)
Sustainable Supply Management

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Overview
 Definitions
 Characterists of Sustainable Purchasing
 Aspects of Sustainability
 Principles of Sustainability
 Drivers of Sustainability
 Benefits of Sustainability
 Objectives of Sustainability
 A framework for Policy development
 3- Legged Stool
 Conclusion

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Definitions
 Sustainable Purchasing is an approach to
purchasing products and services that
takes into account the economic,
environmental and social impacts of an
organisation’s buying choices, at all times.
 is about ensuring that the values that are
core to the business are transferred
through the organisation’s supply chain
into the lifecycle of the organisation’s
products and services.

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Definitions
 “An acquisition process whereby
organisations meet their requirements for
goods, services, works and utilities in a way
that achieves value for money on a whole of
life basis in terms of generating benefits not
only to the Organisation, but also to society
and the economy, whilst minimising its
impact on the environment.” (United
Nations Environment Programme n.d.)7 To
view the full definition
http://www.unep.fr/scp/procurement/

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Definitions
 the planning for a changing climate, a
resource and carbon constrained future
and a socially-beneficial, supportive and
inclusive society.
 Its three dimensional namely; economic,
environmental and social
 Sustainable production
 Sustainable consumption
 Sustainable procurement
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Characteristics of Sustainable
Products
 less energy consumption and water
efficiency;
 lowest hazardous material content
available;
 longer life and greater upgradability;
 reduced packaging and waste;
 increased recycling capability.
 lower running and disposal costs,

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SUSTAINABILITY

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SUSTAINABLE PRODUCTION

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Aspects of sustainability
 Green procurement
 Environmental procurement
 Affirmative procurement
 Responsible procurement
 Social responsibility procurement

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Principles of Sustainability

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Drivers of sustainability
 Values (environmental & social concerns)
 Markets (competition)
 Lifecycle technology (span on whole
business processes)
 Partnerships (increased collaboration)
 Corporate governance

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Internal drivers & enablers of
sustainability
 The corporate mission, vision and objectives
 Existing CSR and/or corporate citizenship
 Senior management visionaries
 Accountability and performance
management mechanisms
 Robust risk management processes
 Internal stakeholder demand for
sustainability
 The availability of resources, capacity &
capabilities
 The formulation of business sustainability

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Benefits of sustainability
 Compliance
 Reputational benefits
 Brand proposition, differentiation &
competitive advantage
 Workforce & supply base commitment
 Supply continuity minimisation of failure cost
 Cost management & efficiency
 Improvement and innovation
 Shareholder value
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Conflicts & trade-offs in
sustainability
 Social and environmental responsibility
may conflict with economic performance
 Cost is generally perceived as an issue
 Pressures for quality and compliance may
conflict with cost and sustainable
development
 There maybe need to realign business
processes

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Objectives of sustainable
procurement
 To support and demonstrate an organization-
wide commitment
 To promote sustainable issues throughout the
supply network
 To comply with sustainability legislation
 To define the potential contribution of
procurement
 To ensure that sustainability factors are
considered in making procurement decisions
 To define how procurement will support and
comply with CSR and sustainability objectives

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A framework for policy
development
 Define the vision for sustainable procurement
 Identify and prioritize key issues
 Identify and define opportunities
 Access available resources for improvement
 Identify key principles for sustainable
procurement
 Identify measurable objectives and targets
 Identify roles and responsibilities
 Document, launch, deploy and integrate the policy
 Establish processes for ongoing management and
review of the policy’s acceptance by stakeholders
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Sustainability issues in SC
 Globilisation
 Competitive advantage through global
sourcing
 Globalization and low-cost country
sourcing

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3-Legged Sustainability Stool
Economic Leg Environmental Leg
Good Jobs No Pollution & Waste
Fair wages Renewable Energy
Security Conservation
Infrastructure Restoration
Fair Trade

Social Leg
Working conditions
Health services
Education services
Community & Culture
Social justice

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Sustainability issues in SC
ECONOMIC ISSUES SOCIAL ISSUES ENVIRONMENTAL
ISSUES
Job creation Creating a diverse base of Emissions to air
competitive suppliers
Achieving VFM Fair employment practices Releases to water and land
Supporting SMEs Promoting workforce Sustainable use of resources
welfare
Reducing barriers to entry Supporting skilling and Energy and water
development conservation and mgt
Ensuring business viability to Community benefits Minimization of waste and
provide stable employment by-products
Ensuring supplier Fair trade and ethical Minimization of impacts (e.g.
agreements are competitive sourcing practices vibrations)
and fair

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Role of responsible purchasers
Language barriers • Be sensitive to language issues
• Seeks feedback & check
understanding
• Check that supplier understands
obejectives
Cultural factors • Learn about cross cultural issues
• Invest time in knowing suppliers
• Promote and enforce ethical
sustainability standards
• Use understanding
Labours standards • Assess whether minimum labour
standards are in place
• Work with suppliers who value workers

Wages and social security • Investigate and encourage equal


opportunities
• Consider potential risk and exploitation
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Sustainability initiatives & standards
The International Labour Organisation (ILO)
 The Declaration on Fundamental Principles & Rights at Work
(1998)
1. Elimination of child labour
2. Abolition of forced labour
3. Equality and
4. Freedom of association
 The Declaration of Principles Concerning Multinational
Enterprises & Social Policy
1. Sustainable development & compliance polices
2. Employment
3. Training
4. Work/life conditions and
5. Industrial relations

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Read Further on
 Business Ethics and Purchasing Ethics
 Corporate Social Responsibility

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