The magazine Procurement Leaders suggests that procurement professionals should build new and enduring relationships with colleagues in trade finance and sustainability departments to help advance their mutual objectives in 2019.
The three groups have traditionally operated in disparate ways but share some important concerns. They all have interests in gaining accurate measures of sustainability performance throughout the supply chain, an issue that the 2018 Deloitte CPO Survey found had risen to sixth position in the hierarchy of priorities for procurement executives. Cost reduction remained at the top. Further research shows that trade finance professionals are seeking to integrate sustainability more centrally into their offerings, suggesting there is scope for procurement practitioners to work collaboratively with them on the issue.
Sustainability professionals understand the need for cost reduction, sourcing savings, tail spend management, etc., to achieve organisational savings if CSR considerations are factored into the equations. Working with a smaller pool of first-tier suppliers, for example, can help improve company cost reduction, as well as streamlining sustainability efforts. All participants are united in the goal to improve visibility and foster a more connected supply chain for the suppliers further upstream. Working together to engage upstream suppliers is critical to each practitioners’ efforts. Procurement professionals, for example, understand that some of the greatest dangers to the supply chain reside there, while sustainability pros see the biggest challenges there. Trade finance professionals appreciate that there are finance opportunities upstream but need improved access to minimise the risk in these opportunities.
Collaborating to make the case for digitalisation to aid these common concerns is likely to be a more effective strategy for persuading hard-boiled CFOs to come onboard than three separate approaches would be. 2019 may be the year when the silos are broken down between these groups and procurement optimisation, maximised returns from trade finance, and enhanced sustainability throughout the supply chain become integrated operations.