Welcome to the penultimate post in the CSR for smaller businesses series and thanks for your patience since the previous articles.
Today’s post is going to look at getting more out of supply chain relationships, which in itself can almost be an oxymoron. Discussions with suppliers can tend to amount to a brief discussion on price and then either an agreement or not. Too many businesses undervalue the power of deeper relationships with the suppliers that provide the vital resources needed to enable your business to operate.
Price is ultimately the deciding factor in the majority of business purchase decisions but don’t be blinkered by hard bargaining. Opening up your decision making radar beyond just cost can deliver impressive returns in varied ways.
Here are some of the CSR related benefits available and how to get them:
1. Keep it local
Isn’t it easier to deal with a supplier that you could easily go and talk to? Customers also like to see their money being kept in their community, so tell them you use local suppliers. Sourcing products locally will also help lower your own carbon footprint by reducing travel miles.
2. Build relationships
Even if you don’t have a current commercial agreement always keep suppliers on good terms in case you need to go back to them. If you feel you have to leave a particular supplier explain why and give them the opportunity to improve. I’ve already underlined the focus on cost but at the end of the day people buy people. You will alwayshave more success at negotiating with somebody you have a stronger relationship with. Don’t forget the thoughtful presents or cards but try to remember other events rather than Christmas when gifts get lost in the season!
3. Question environmental credentials
How green are your suppliers? Do they have similar standards to your own? If you have an environmental management system such as ISO 14001 can you encourage your suppliers to do the same? Can you help them get it by sharing knowledge or resources. How about hosting an environmental workshop? Understanding the environmental impact of your supplies will become increasingly important as carbon footprint measurement climbs the priority ladder. Check out the recently published PAS 2050 if you want to begin to measure emissions per individual product. Larger contracts, both public and private will require environmental accreditation all the way down the supply chain.
4. Value social engagement
As above but do you have a similar approach to the local community or engaging with staff? Can you share training resources or events, team up to support a charity or share spare resources for community benefit? Do your suppliers have Investors in People accreditation?
5. Challenge packaging
Do you know what do you buy most of? Do you really need all of the packaging that comes with purchases? Can you order in bulk? Can the packaging be reused and returned with each delivery? Do a quick audit on your annual buying and look for opportunities to reduce costs by reducing or reusing packaging materials.
One company I know were buying over 500 individual identical unit items per year and transporting each nationally. Just by having an simple conversation with the supplier to put multiple units on a pallet at a time without all the previous packaging saved hours in preparation time at the warehouse, thousands of road miles (therefore fuel) and hundreds of tonnes of waste. In this great example of relationship building the buyer shared the cost savings with the supplier as an incentive.
6. Share information
At the core of building relationships it comes down to the sharing of information or resources. Almost every business uses items such as copier paper, coffee, sugar, toner, envelopes etc. Can you join with other neighbouring businesses (or schools, churches, community groups, etc) to get a better price for supplies and reduce packaging?
Share good practice. If your business has seen benefits from gaining ISO 14001 or Investors in People, encourage your suppliers to do so as well. It can only help enhance the level of professionalism and reduce your level of risk.
7. Fairtrade and Recycled
Have you compared products or services like for like? Even in today’s challenging economic times increased customer expectations and awareness is still reinforcing the market for ethically sourced and environmentally friendly items. Have you made a cost / benefit analysis of your supplies against those that are Fairtrade, high-recycled content materials etc?
The quality and price of your source materials are paramount but always take a little extra time to compare the cost, the environmental benefits and the social opportunities before you make your final decision.
Have you ever changed supplier for green or non-price related reasons?