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be used to differentiate the product from its competitors.THE FORCES OF CHANGEThe analysis of the organisations surveyed revealsthat sustainable purchasing strategies are typicallydriven by three factors: risk control (41 per cent),regulation (25 per cent) and value creation (25 percent).MAIN DRIVERS OF A SUSTAINABLEPURCHASING STRATEGYPurchasing functions are responsible for managingand mitigating a number of external risks that couldpotentially damage the organisation's image.Organisations effectively "inherit" the negativeimpact of any poor practices employed by theirsuppliers. For an example, organisations that havebeen discovered to be sourcing goods from suppliersthat engage in child labour have undergone extensivecriticism in the media often resulting in significantfalls in their market share.Purchasing departments are becoming increasinglyinvolved and informed about practices for managingand mitigating the risks associated with supplierselection. New processes and controls areimplemented in addition to on-going suppliermanagement assessments. This is used to limit the risk of suppliers impacting supply and causingconsequential damage to the organisation's imageand therefore both sales and profitability.CREATING OPPORTUNITY THROUGHSUSTAINABLE PRACTICESThe increased focus on sustainability has also forcedorganisations to take a new approach to how theyoperate. Sixty two per cent of European companiesrecognise that CSR is driving innovation. This change is occurring throughout the supplychain. Stakeholders agree that a sustainablepurchasing approach can result in real opportunitiesfor growth, but only if sustainable actions are alignedwith the company strategy. Purchasing departmentsare becoming increasingly involved in drivinginnovation in their own organisations as they are theprimary point of contact with suppliers. By maintaining awareness of new products andsolutions, purchasing departments can work closelywith the product and service design team tointroduce new practices and new products ahead of their competitors. Through closer supplier076GREEN SUPPLY CHAINMAIN DRIVERS OF A SUSTAINABLE PURCHASING STRATEGYMAIN IMPEDIMENT: INCONSISTENCY WITH SHORT-TERM OBJECTIVES" "THE WAY AN ORGANISATIONMANUFACTURESITS PRODUCTS ANDSOURCES ITS RAWMATERIALS CANNOT ONLY IMPACTTHE BOTTOM LINE,BUT ALSO MAKEOR BREAK A BRAND

relationships purchasing departments can engage with suppliers to encourage innovation fromthem. Closer collaboration with suppliers allowsorganisations to encourage new thinking andimproved environmental practices in line with theirown product development plans. In addition, suppliers are encouraged to proactivelybring new ideas to their customers, which can beused to improve their overall product portfolio orefficiencies. A leading consumer goods company faced thechallenge of finding a new competitive advantage for its main product. The marketing and purchasingdepartments worked together to develop anenvironmentally friendly eco-design product, that was made from renewable plant adhesives and was 100 per cent recycled paper. The re-design resulted in an increase in the sellingprice, but also strengthened the brand image andreinforced the company's position in the marketlong-term, based on a strong business case.Implementing a sustainable purchasing modelmeans going beyond the limited vision of thestandard Total Cost of Ownership (TCO) approachand transforming it into a sustainable cost ofownership that takes long-term benefits intoaccount. This should include the opportunities to open new markets and boost themarket share. MAKING SUSTAINABLE PURCHASINGA REALITYIn our opinion, cross-functional involvement withinan organisation and with its suppliers is aprerequisite for a successful sustainable purchasingpolicy that creates value for that organisation.Sustainable purchasing practices are driven by bothinternal and external customers, with 46 per cent ofpurchasing directors acknowledging that in-housecustomers also expect value creation fromsustainable purchasing. The next generation of buyers will increase theirareas of responsibility and control sustainable TCOthroughout a product's lifecycle. They will play a keyrole in driving innovation within the organisation -from the early design phases of a product through toits production and distribution. Organisations that are quick to respond to thegrowing trend will benefit from improved relationswith customers, suppliers and employees alike.The implementation of sustainable purchasingreflects sourcing and CSR best practices. It alsoprovides a real development opportunity for the mostadvanced organisations. Although half of our panelbelieves that the Corporate Social Responsibility isincompatible with short-term objectives, otherpurchasing directors have managed to overcome thisobstacle in a proactive and positive way. The business case for change is quickly identifiedand the benefits achieved can reach beyondpurchasing. Making sustainable purchasing a realitydelivers results for both the planet and business! nABOUT BEARINGPOINTWe deliver Business Consulting with managementand technology capabilities. We are an independentfirm with European roots and a global reach. Intoday's world, we think expertise is not enough.Driven by a strong entrepreneurial mindset anddesire to create long-term partnerships, our 3,200Consultants are committed to creating greaterclient value, from strategy through toimplementation, delivering tangible results. As our clients' trusted advisor for many years, wedefine where to go and how to get there.To get there. Together. www.bearingpoint.comGREEN SUPPLY CHAIN077SUSTAINABLE-TCO ("S-TCO") MODEL