Sustainability Strategy and Roadmap for SCM and Procurement
Efficient and Pragmatic Implementation in Three Steps
How ambitious is your company about its sustainability and where does the competition stand? How can a company-wide sustainability strategy be integrated pragmatically and efficiently in supply chain management and procurement?
When we undertake a project for the structured and efficient implementation of a sustainability strategy, it comprises three steps:
- Sustainability, materiality, and risk assessment, (second) materiality analysis
- Strategic future and industry trends
- Sustainability and engagement workshops, surveys, interviews
- Comprehensive benchmarking of sustainability level within the HÖVELER HOLZMANN Sustainability Framework
- Develop sustainability strategy and targets (functional strategy) for supply chain management and procurement based on sustainability context and/or ESG strategy
- Derive areas of action and prioritize measures aimed at increasing sustainability performance
- Draw up Sustainability Roadmap
- Establish guideline, governance, and reporting structures including sustainability metrics (such as a Sustainability Balanced Scorecard)
- Establish sustainability criteria in core processes and develop a risk management system
- Embed sustainability initiatives in commodity group strategies and management (through initiatives such as Green Lever Workshops)
- Prioritize digitization requirements, define functionalities, and select tool and software solutions (for CO2e measurement, for instance)
- Continue to develop the organization and establish new role profiles relating to specific sustainability requirements
Site Assessments Within the HÖVELER HOLZMANN Sustainability Framework
We help you to improve your sustainability performance along your entire value chain in these seven dimensions:
Our focus is on dovetailing and translating your company’s overarching ESG/sustainability strategy into measurable SCM and procurement targets and strategies along the value chain. This ensures that you’re doing the utmost to fulfill your own sustainability ambitions. Another essential component is drawing up specific target values and metrics (such as in the form of a Sustainability Balanced Scorecard) with which to track sustainability performance and clearly demonstrate sustainability successes in your business.
- Value enhancement: You concentrate on the right action areas and suppliers, because SCM and procurement work are focused and strategically aligned, pursuing only those initiatives that contribute to achieving your sustainability goals.
- Confidence: You ensure that the focus is always right and you can always demonstrate to your own Executive Board and departments, as well as external partners (suppliers, customers, authorities, etc.), that your SCM and procurement are permanently engaged in a sustainable value chain (“internal and external stakeholder orientation”).
- Reputation: You enhance the reputation of your SCM and procurement, because they are fully targeted and transparent, so they really help you achieve the sustainability success you are looking for.
To ensure compliance with sustainability guidelines and laws – as well as customer demands – this dimension examines whether your documentation and governance mechanisms meet current and future requirements. This helps you to ensure that requirements such as environmental and social due diligence are met within your business and adhered to by its own employees and by suppliers along the chain.
- Fulfill internal and external due diligence obligations: Make an active contribution to safeguarding people’s quality of life by observing social and ecological standards. This helps you safeguard your social license to operate.
- Protect against reputation damage: By ensuring corporate due diligence is exercised in a pragmatic way, you protect your entire company against reputational damage and its negative impacts on your sales and corporate image.
- Avoid penalties and exclusion from tenders: By exercising corporate due diligence, you avoid penalties and being excluded from public tendering process, as well as other sanctions, and this helps you stay competitive.
Integrating sustainability criteria and tools into core processes is one of the most important dimensions when it comes to operationalizing your strategy and translating it efficiently into daily work and the mindset of your workforce. This involves, for example, analyzing the extent to which suitable sustainability criteria are already included in the supplier selection process, and whether these are also embedded in a mandatory supplier evaluation model in the strategic sourcing process. Another example is that it involves, in supplier management, using the right criteria to reveal suppliers’ sustainability impacts, and to choose the ones suited to close strategic cooperation.
- Ensure competitiveness: Enjoy the certainty of working long term with the best-performing suppliers – those that fully meet the requirements of your company, your investors, and your customers: social and environmental criteria, due diligence, financial stability, and so on.
- Secure your supply lines and make your business resilient: By including sustainability risks in a comprehensive risk management process, you can make your SCM and procurement processes future-proof and resilient.
- Reputation: Enhance the reputation of your SCM and procurement departments by helping them to integrate sustainability criteria fully and meaningfully into existing processes, thus making a major contribution to your sustainability targets.
In this dimension, we derive specific commodity group strategies and sustainability initiatives and prioritize them for implementation. Commodity group initiatives range from optimizing outbound and inbound logistics by improving route planning and selecting best-emissions suppliers, to switching to sustainable packaging elements and conducting renewable energy pilot schemes. To begin with, a step-by-step plan ensures that you choose “quick wins”. These are initiatives that give you maximum sustainability performance increase for minimum effort.
Savings: Combine sustainability and economic aspects through targeted initiatives. This gives you twice the added value within your company.
Effieciency gains:Focus on the most important product groups and suppliers, as our step-by-step plan provides you with clear pointers on where procurement should invest its time and resources (= personnel costs) to achieve the greatest sustainability and value gains.
- Reputation: Enhance your company’s reputation internally through a strategic approach to sustainability that delivers visible results and clearly demonstrates your value proposition to internal as well as external stakeholders.
Ensure competitiveness: Realize and implement your sustainability ambitions to ensure long-term competitiveness for your business in an increasingly regulated business environment.
Choosing the right digital solutions to reduce manual work and automate sustainability efforts throughout your SCM and procurement processes is a key factor in achieving efficiency and quality in sustainable SCM and procurement. That’s why it is important to understand today’s highly fragmented tool solutions market and select the right sustainability tools for things like tracking carbon emissions and risk monitoring, while taking into account your own IT landscape and requirements.
Our consulting services in the area of software
- Increase performance and efficiency: Optimizing your tools and IT systems significantly increases the quality and speed of your sustainability processes, as IT solutions automate repetitive, time-consuming, and manual work, ensuring consistent high quality with short cycle times and lower personnel costs.
- Information advantage: In-depth analyses generate information that helps SCM and procurement, as well as top management, make decisions and translate them into specific activities.
- Reputation: Credible, data-based information enables you to convince the outside world and highlight your sustainability ambitions.
This dimension examines the way you work with suppliers. Developing shared ways of assessing and improving your environmental and social footprint with strategically important suppliers along the entire supply chain is an important tool on the road to achieving your sustainability targets.
Working in cross-functional sustainability workshops, we help you identify shared sustainability methods with key suppliers for each step along the value chain, then implement them.
- Business innovation and security: Collaborating closely increases mutual understanding of goals and challenges, encouraging true long-term partnerships that can achieve shared sustainability goals and often lead to business and process innovations with a significant impact.
- Future-proofing and risk avoidance: Help your suppliers future-proof themselves, avoid the inconvenience of having to look for new suppliers as regulatory sustainability requirements tighten, and protect yourself against the risks of retaining non-sustainable suppliers.
- Reputation: Active supplier engagement lets suppliers feel your appreciation, which more often than not they reward by making you their preferred customer; this has a positive impact on your buying and delivery conditions.
This dimension is about organizational and personnel change management. If you want to efficiently and effectively integrate sustainability into existing processes, you often need to develop organizational aspects as well as governance, and to establish new roles in SCM and procurement that address specific sustainability needs. Existing staff also have to be trained so that they are properly prepared for sustainability positions and responsibilities.
- Value enhancement: Efficiently incorporate sustainability by improving your staff quality and motivation. Because they enjoy their work more, they can help resolve the major challenges that lie ahead.
- Reputation: People gravitate towards employers who care about sustainability. Corporate responsibility is an increasingly important factor in the contest for talent and enables companies to stand out from their rivals.
- Confidence: Enjoy the certainty of having prepared and deployed your staff in the best possible way for upcoming challenges.
We look forward to hearing from you.
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