Social Responsibility vs. Cost Efficiency: It's not a tough decision.

The gap between cost-efficient and sustainable procurement methods is closing quickly, according to an article posted in Supply Chain Dive by author Rich Weissman.

Social and environmental responsibility has become an increasing focus for supply chain experts globally. Areas where sustainable development can make some of it’s greatest impact within the value chain are the sourcing and procurement of materials and products.

The traditional structure of procurement and sourcing has been focused around a low-cost model. Simply, buy in products and materials from the supplier offering the best bid, and turn a blind eye to actual production methods. And, from there, reap the benefits of driving top-line revenue through low-cost procurement costs.

Sustainable products have, typically, cost more than those that have less focus on social and environmental impact during the production lifecycle. For this reason, buyers buying with a low-cost mentality have snubbed sustainably acting suppliers for many years.

But, the tides are changing quickly, and sustainable brands have become the new standard.

Consumers look to buy from brands that procure with social responsibility in mind. This has driven a global market shift within the global supply chain.

“An increasing number of suppliers have embraced sustainability as an operational philosophy, and that has changed pricing and market strategies” (Weissman 2017).

This has been a major shift. Today, green labels can even be procured as the the more cost efficient products. The growing focus on social change within procurement doesn’t just affect brands and top-line positively, but ripples out into society at large.

With sustainable procurement no longer bearing a hefty price, it begs the question:

Is your business focusing in on true sustainable sourcing and procurement?

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