By Charles Dominick
Procurement is now arguably as respected a function as there is an organization. That wasn’t always the case, though.
It first took executives to realize that good procurement could contribute to profit improvements. After that, it took executives to realize that good procurement could contribute to competitive advantage.
And, now, executives are realizing that good procurement can be perhaps the biggest contributor in an area in which organizations are being increasingly evaluated: Social responsibility.
Today’s consumers don’t just want competitively priced products and services. They don’t just want the highest quality products and services.
They want to feel good about the type of company their purchases support. They want to feel that the company contributes positively to the world. Successful companies are able to win over consumer markets by demonstrating their socially responsible business practices.
And procurement is positioned perfectly to enable a company to become more socially responsible than ever.
The spirit of corporate social responsibility is simply doing the right thing. It is doing things in a way that makes the world a kinder, better place. It is making sure that money flowing through the supply chain does not, in any way, go towards supporting nefarious activities.
What nefarious activities can occur in a supply chain?
Well, did you know that certain types of minerals used in products ranging from toothpaste to electronics originate in mines operated by militias engaged in child enslavement and sexual violence who use their profits to fight their government? A socially responsible company would never want to know that the money it spends supports such atrocities.
Though perhaps not as violent, poorly monitored supply chains can also perpetuate the use of child and slave labor, hazardous working conditions, environmentally destructive behaviors, and so on.
With today’s strong focus on social responsibility, procurement departments say “Not in my supply chain!”
But socially responsible procurement is about more than just preventing bad things from happening. It’s also about fostering the growth of good things. For example, supplier diversity programs help historically disadvantaged groups of people share in the world’s economic prosperity. Sustainability programs help ensure that valuable resources are protected and remain available for future generations.
Social responsibility has been the key to procurement methods being touted as a reason to choose one brand over another. Starbucks’ coffee packaging references its methods of “ethically sourcing.” The packaging of certain paper products reference the producers’ Certified Sourcing practices, which are geared to be more environmentally friendly. Automobile price stickers enable producers to tout their domestic sourcing by disclosing percentages of foreign parts content.
Finally, procurement practices are front and center for the consumer’s viewing. Thanks to the rise of focus on social responsibility, procurement practices are now seen as strategically influential. In fact, don’t be surprised if social responsibility measures become more important than cost in supplier selection.
It’s a new world of procurement. Immerse yourself in social responsibility and join it!
Charles Dominick, SPSM, SPSM2, SPSM3 is President and Chief Procurement Officer of the Next Level Purchasing Association (NLPA). He has authored most of the NLPA’s online courses and is the mastermind behind the prestigious Senior Professional in Supply Management (SPSM) family of certifications, earned in over 90 countries. He heads up the development of the NLPA’s annual purchasing and supply management salary reports, which are groundbreaking and industry-leading pieces of research, always unparalleled in the field by far.
Dominick is co-author of the book, “The Procurement Game Plan: Winning Strategies and Techniques for Supply Management Professionals.” His articles and interviews have been included in countless supply chain publications. His clients have had their post-training success stories featured in multiple magazines, including two cover stories in Supply & Demand Chain Executive.
Before founding Next Level Purchasing in 2000, Dominick delivered great procurement results as an employee of the Kurt J. Lesker Company, US Airways, and the University of Pittsburgh. He holds the SPSM, SPSM2 and SPSM3 Certifications and a Bachelor’s Degree in Business Administration from Duquesne University. He is frequently recruited to deliver educational seminars throughout the U.S. and beyond.
George E. Krauter
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