Procure a better world

Students and workers took to the streets last month to demand urgent action from the government to address climate change.

Students rally in Sydney last month to demand more action to address climate change.

Students and workers around Australia took to the streets last month to demand urgent action from the government to address climate change.

This globally backed campaign is an example of the groundswell of consumers and investors who expect better ethical behaviour from their favourite brands and suppliers.

But it also confirms an age-old conundrum: how does a large corporation that has been functioning in a certain way for decades change its old-school behaviour?

The power lies with procurement. Where a company spends its money dictates its environmental, social and economic impact, and the chief procurement officer is ultimately the one with access to the corporate wallet.

Transparency is the biggest challenge facing the procurement profession. A lack of visibility has a direct impact on quality control, labour issues and inefficiency across increasingly elongated and global supply chains.

The Global Slavery Index estimates that there are still 15,000 people working under conditions of modern slavery in Australia each day. Australia’s Modern Slavery Act 2018 made significant inroads to increase awareness and progress change, but zero slavery is a hard benchmark to achieve with immediate effect. Realistically, there is unethical practice in almost every major supply chain in Australia, and it’s up to the procurement profession to collaborate to find sustainable, ongoing solutions without risking their bottom line.

Contrary to popular belief, this “supply chain nirvana” — where social, environmental and economic concerns are viewed with equal importance — is possible

Remember that one small needle-tampering disaster in Australia’s strawberry industry? It led to a mass exodus of all the country’s suppliers, with 20 per cent of growers retiring in one year alone, unable to recover from the reputation loss and increased price of production.

There is no cost trade-off to ethical behaviour and the risks of unethical procurement are far more severe.

Transparent supply chains also help with cost-cutting, productivity, reputation and efficiency. Visibility enables flexibility and agility, allowing businesses to rapidly evolve their business models to meet market expectations. When you can see every link, you can change any link.

My best advice? Have the talks, do the research, visit your suppliers. The old manufacturing advice always to “walk through the plant” is true: you can trust a supplier by the way they run their factory floor.

And remember, you don’t have to wait for legislation to make a change. CPOs can create voluntary groundswells in their jurisdictions no matter how unregulated they are. After all, finance, HR and marketing don’t make these decisions. Procurement is power, and with power comes responsibility — you hold the credit card for your company and it’s up to you to swipe wisely.

You may not be able to change the world but you can change your category in it.

Tania Seary is founding chairman of Procurious.