Procuring the right way

21 March 2024

To celebrate ‘World Sustainable Procurement Day’ we posed a few questions to Hazel Culley our Director of FMCG and Retail.  Prior to joining twentyfifty, she spent more than 20 years working with supply chains at Sainsbury’s, Sedex and Marks & Spencer.

With companies keen to cut costs and supply chains facing volatility from climate change, conflict and political instability, it’s a challenging time to be a procurement professional. We caught up with Hazel to find out how responsible purchasing yields clear benefits for businesses – and how twentyfifty can help.

What is responsible procurement and why should businesses engage?

Responsible procurement involves procuring goods and services in environmentally and socially responsible ways.  Businesses should engage because it is the right thing to do. When businesses treat their suppliers with fairness and respect and discuss the value of human rights and sustainability, they win their loyalty. Procurement teams really benefit when they move to a longer term partnership model where buyers and suppliers work together to achieve goals including human rights.

The customer that is an ethical, trusted partner is the one that a supplier will prioritise for its best quality products, quickest lead times, highest standards, and availability when supplies are low.  With supply chains being so volatile, this relationship is more important than ever.

When a supplier knows they’ve got a long-term contract for a decent volume, they can plan labour and pass on the benefits including permanent contracts to their workers.  They are also better able to retain skilled and experienced people.  If buyers and procurement teams do responsible purchasing well, there really are a whole host of benefits aside from the clear human rights and environmental reasons.

How are businesses moving towards responsible procurement?

The good news is that it’s definitely higher on the agenda than it used to be.  Some businesses are making more responsible choices in purchasing because they understand the many positive benefits of good relationships with their suppliers, which go beyond human rights. Others may be motivated by reputational and regulatory factors such as the Grocery Code of Conduct or the Better Buying Scorecard and for some it’s just about doing the right thing for workers and farmers in their supply chain.

Challenges in global supply chains – shortages of raw materials and products for example – also means the power balance has shifted a little. Buyers no longer hold all the cards.  And I think the new generations coming up in procurement are determined to work in a way that’s positive for people and for the environment. They see the vital role the supply chain must play in the transition to net zero.

What are some of the barriers preventing progress?

Often procurement teams are looking after supplier lists that run into hundreds or even thousands. It’s impossible to develop relationships with every supplier so they end up focusing on a small portion of large suppliers, leaving a very long tail of smaller suppliers who perhaps aren’t being scrutinised as thoroughly.

There’s often a disconnect when it comes to targets too. While sustainability teams might be working to one set of goals, in procurement the main aims can be quite different – usually focused on keeping margins high and costs to a minimum. If internal teams don’t work together to come up with shared objectives and joint solutions, even the best of intentions can fail.

So how can twentyfifty help businesses get this right?

“Often human rights and sustainability professionals don't speak the commercial language that procurement teams need to hear.  At twentyfifty we do. I was a buyer for several years, working with teams and suppliers around the world, so I understand the challenges they face.” Hazel Culley, Director FMCG and Retail, twentyfifty.

We recognise that different sectors procure in different ways and it’s important to understand the nuances.  Our experience means we can speak to procurement teams using their language and bring human rights and procurement teams together to enable shared solutions.

Our approach is to work closely with businesses to embed the tools they need to establish responsible procurement principles and link those to tangible performance indicators that fit their goals.

We also deliver tailored training for procurement teams that’s designed to show that they can get strong commercial results from strong ethical commitments.

And we make sure that by working more responsibly, they don’t compromise on competitiveness. It ladders up to a better outcome for everyone.