Improving Sustainability, Supply Chains Biggest Issues Facing Sourcing Leaders

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Increasing sustainability and managing supply chains are the top priorities of sourcing and procurement executives, according to a new report by Keelvar.

The 2021 Voices of Sourcing report found that increasing sustainability will increase value for the executives, with the objective outranking quality, innovation and cost. Yet 32% of respondents rank sustainability as very important to them at this moment and that 65% of them say justifying cost increases to reach sustainability goals is a roadblock.

Nearly 73% say sustainability is the most likely supplier attribute to increase over the next five years, followed innovation. Supply chains are a priority to the organizations of the professionals surveyed, with 68% of them saying they are very important.

There were a range of topics addressed regarding sustainability goals, with using recycled materials and packaging leading the way, followed by reducing water consumption and reducing transportation emissions. Reducing overall greenhouse gas and Scope 3 emissions, reaching net zero and finding renewable energy sources also gained some attention from the survey respondents.

Sustainability has proven tricky across industries. A recent study from EcoVadis that rated how industries did with the objective, including rating environment and sustainable procurement, no industries received an advanced score.

Sustainability answers also varied depending on where respondents are located. More than a quarter of respondents from Europe listed sustainability as a stressful issue compared to 12% from North America. The survey shows similar numbers when more specific, such as whether recycled packaging would be the most impactful over the next five years.

Justifying the costs of reaching sustainability is the biggest challenge, according to the report, with 65% listing it as an issue. Keelvar says this indicates there is a potential disconnect with top corporate goals and actual sourcing practices.

How companies report on and measure the impact of sustainable changes is also difficult, according to 58% of respondents, if sourcing is not digitized and centrally tracked and if relevant data is not collected during that process.

As for supply chains, the business leaders say the face several challenges. Meeting costs and having the ability to react to disruptions are big focuses in handling supply chains, as well as reliability and fluctuating supply and capacity constraints.

Supply chains have faced threats recently from climate events as well power issues and face increasing pressure to be ethically sourced throughout the entire procurement process.

Many in the survey also haven’t seen technological advances that can help their sourcing, but nearly all the respondents say at least part of the process should be more automated.

The survey included more than 100 executives in industries including consumer goods, food and beverage, industrial and automotive manufacturing, and transportation among others. The respondents manage transportation, direct and indirect materials, indirect services and packaging for their companies. Nearly all the respondents work for supply chain driven businesses, a three-quarters of which make more than $1 billion.

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–> This post appeared first on Environment + Energy Leader.

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