Sustainable global sourcing, even with the Immediate concerns of Inflation and the Increased cost of living, remains Important to any business over the long term.

Overview

 Sustainable global sourcing remains important for all companies’ supply chains, even though we are living through times of huge turmoil.  The events of the past few years have brought huge changes to our lives due to the Pandemic, the war in Ukraine and both inflationary and recessionary pressures across global markets. These events have ushered in significant challenges for business, requiring both a short and medium term response.

However, many of the most severe, long term, risks facing Business are driven by environmental factors. Factors that were effecting us before Covid and still have the potential to pose a significant threat to long term business stability.

• Climate action failure
• Extreme weather events
• Biodiversity loss

The World Economic Forum’s global risk register is clear in their assessment of the global risks. Five of the top ten are linked to the environment.

Our commitments to Sustainable Sourcing

 As a leading global sourcing company with offices in seven countries and over 20 nationalities working within our organisation, we have a very global outlook.   As a team we have worked to align our business around a future where good business can be good for business.

“instead of simply trying to do less harm we should aim to do some good”  Ellen MacArthur Foundation.

Our Vision is to deliver Growth with Purpose

 A central part of our vision is to define our sustainability roadmap, identifying how we can play our part in the global challenges outlined by the World Economic Forum and the United Nations in their Sustainable Development goals.

Our roadmap to sustainable business is built upon two pillars

• Reducing our GHG emissions by 20%
• We will be a Zero accident in our business
• Development plans in place for all our colleagues
• % of profits invested in community project

• We will be a Zero accident in our business
• Development plans in place for all our colleagues
• % of profits invested in community projects
• We will support colleagues Volunteering days

Our Strategic Vision

Our sustainability plan is central to delivering our Vision and our Strategic Growth plan through to 2025. It is a bold ambition to better serve our clients, our partners, our colleagues and the local communities that we are both a part of as well as impact.

It reflects our combined ambition as a team of 250 colleagues across the World.  To work for a business that has a strong and clearly defined ambition to deliver sourcing in the right way.

Unlocking the value for stakeholders in the extended supply chain, we recognise that only by working collaboratively with all our partners, clients, suppliers, colleagues, and local communities can we start to play our part in overcoming the global challenges we all face.

The Drive for More Sustainable Sourcing

We recognise the increased need to define, measure and take action on the impact of supply chains on sustainability targets.

As sourcing leaders continue to deal with the regular challenges of delivering quality and price within the context of global trade turmoil, they are increasingly having to wrestle with the increasing challenge of sustainability targets.

For companies of all sizes, serving all markets there are increasing questions from their customers, consumers and clients. Not just about the cost of their

products but of the environmental and societal cost and impact in the manufacturer and distribution.

Answering these questions requires a newer more unique set of skills to measure and define targets and to work with the full value chain to take effective action in a transparent way.

For most companies the central element of their environmental commitments will be to reduce their Greenhouse gas emissions (GHG) – particularly on the back of COP26 and Carbon Emissions.  Scope 1 and Scope 2 emissions tend to be easier to get to grips with as there are fully within companies control.

At Scope 3 level the challenge becomes harder and simultaneously bigger. Many companies typically seeing 95% of their GHG emissions being created within scope 3.

Conclusion

 Building a more sustainable supply chain for many organisations will start with emissions measurement. Creating successful interventions will require collaborations with like-minded partners throughout the value chain and the measurement tools to effectively identify emissions creation and hot spots.

The journey towards sustainable business is one built on partnership, transparency and shared goals.

Supporting Your Journey to Sustainable Sourcing

 As a leading global sourcing company, with over twenty years’ experience supporting our clients develop and deliver their sourcing strategies.  We are here to support you with all your sustainable business tracking needs. Emissions tracking, social and ethical audit.

For more, email us at Contact@et2cint.com.

Supply chain resilience over the past 3 years has been the subject of many column inches, but what does this mean to companies on an operational level?   

Overview 

Supply chain resilience addresses (or should at least) some of the disruption to global markets that has been seen these past years.   With more frequent supply chain shocks, which are of increasing severity,  the ability for companies to mitigate these risks will be important given the adverse economic headwinds that are building in Western markets.  

Supply chains that reach across continents and Oceans are already complex.  Overlay these with the disruption and inflationary factors that are now evident the world over, and it just got a lot more complex.  But for ‘Product companies’ (retailers, wholesalers, distributors etc), the supply chain is an integral function of the business.  Without the suppliers, there are no products. And without products there is no business.   

A Strategic Function 

Consequently, CEOs across the globe are increasingly focusing their attention on their supply chains and their impact and implications.  Sourcing is being recognised as a critical function in the delivery of business strategy. Whereas the traditional focus was on Price, Quality & Service, this triumvirate has now been also coupled with Resilience, Agility & Sustainability.  

These new challenges are forcing an intense focus on supply chain priorities and team structures and responsibilities.  This encompasses both the relevant expertise and knowledge to leverage one’s sourcing capability as well as the necessary market coverage.   

Future Proofing: 

The business need to navigate a robust and resilient pathway through these dynamic events are focusing attention on the any sourcing function.   Supply chain resilience ultimately means building capability for a plan B and plan C, and maybe even plan D.  But unlike the past where most supplier matrices focused solely on the China market, these options will likely straddle multiple markets, which further overlays complexity.  

Whilst the need to ensure quality product that is delivered in good time remains the same. The traditional (sometimes obsessional) focus on price is now having to be balanced with the need for resilience and visibility of supply (i.e. some products are better than none!).    

McKinsey in their recent report on supply chain resilience, describe a scenario where supply chain management becomes increasingly complex in the near future to respond to new and divergent demands. As the World economic Forum risk register suggests, the likelihood of further events impacting the world and so business are highly likely. 

Resilience Defined 

Resilience is defined as ‘the capacity to recover quickly from difficulties; toughness’.   In the current and future global environment, it will be essential that the ‘supply chains’ are resistant and can recover quickly given the importance of identifying the right products and getting them to the consumer in the most cost effective and efficient manner.   

In the context of global supply chains and the sourcing function, the key areas of focus in building this resilience should be: 

1. Partnerships – This should not be underestimated.  We have mentioned this ad nauseam over the past couple of years, but long term relationships with suppliers, who share the same goals,  will build in flexibility and allow for enhanced resilience through the ability to be creative with solutions as required.
2. Supplier rationalisation – In line with the first point, a tighter network of supply partners will only help with volume, price points, and commercial opportunities.  
3. Market coverage – Having multiple sourcing jurisdictions where you have onboarded suppliers will negate any regional disruption.  Ideally, there will be supplier partners who you can work with in multiple markets across the same product categories as long as volumes allow this.  In addition, thinking through how you access these markets on the ground and manage your suppliers.  
4. Predictive Data – Building the capability to better predict, prepare and respond to changing needs.  This should be encouraged by giving prominence to sourcing or buying at Board level.   
5. Sustainability – There is the ever pressing need to deliver sustainability commitments, which will also fall on the shoulders of the sourcing function.   In this sense, resilience is seen in the context of viability and the ability of the suppliers to meet the company’s needs (and those of the consumer).  

Summary 

The World Economic Forum predicts that the World will have to deal with a range of challenges in their 2022 risk register.  The signs are already there and commentators are pointing to the economic storm clouds building on the horizon.  

For companies to recover and build a future of robust growth, greater emphasis and investment needs to be given to the role of the sourcing/buying function. As the role of Sourcing/Buying Director expands to become a central part of strategic planning and delivery, the old transactional approach to supply base management will have to be renewed.    This needs to happen to build the resilience required form companies to perform over the medium term.  

Whatever your needs, we are here help you source from global sourcing markets.   Our solutions can help build the resilience that you need.   For more information, please contact us at contact@et2cint.com