Why tough choices are needed if companies want their supply chain strategies to be genuinely fruitful.

1. DIRECTIONS
MONTHLY
SUPPLEMENT
JULY 07
TRENDS AND ISSUES IN THE WORLD
OF CORPORATE REPORTING
AVOIDING LOW
HANGING FRUIT
WHY TOUGH CHOICES ARE NEEDED IF
COMPANIES WANT THEIR SUPPLY CHAIN
STRATEGIES TO BE GENUINELY FRUITFUL

2. Directions Monthly July 2007 Issue 14
Welcome to the July edition of Directions Monthly. The 2012 Olympics brings
with it an opportunity to present the benefits sustainable procurement can
bring – so we thought it was only right to give the supply chain management
issue some much needed attention. We have invited Shaun McCarthy, Director
of Action Sustainability and Chair of the Commission for a Sustainable London
2012, to give us an insight into why businesses need to resist ‘low hanging fruit’
and avoid the quick win approach. He suggests the procurement profession needs
to shape up and create a more ‘fruitful’ strategy to tackle supply chain issues.
Lucie Harrild Pavan Athwal
Businesses need to reconsider the way in which they manage their
supply chain and ensure they are communicating with all who
may hold them accountable. So why is the procurement profession
not realising this opportunity to raise its own profile?
Over the past 50 years, one third of the earth’s strategy or an altruistic initiative. The answer
species have become extinct, a further third of course is both. This is not an ‘or’ thing,
are set to follow if mankind does nothing to it is an ‘and’ thing. They see their core
halt the environmental degradation we see customer base becoming more concerned
today. Some professions, such as procurement, about sustainability and see an opportunity
also face extinction if they do not evolve. Sir to take the right moral course and to satisfy
Neville Simms, the Chairman of the Sustainable their customers at the same time. Rather
Procurement Task Force, defines sustainable than sit and wait for the next Greenpeace
procurement as ‘using procurement to support campaign, leading businesses are grasping
wider social, economic and environmental the opportunity rather than mitigating
objectives, in ways that offer real long-term a risk. Further evidence of the commercial
benefits’. So how high is a sustainable supply opportunities presented by sustainability is
chain on your business agenda? Is your demonstrated by the recent announcement
supply chain in fact a liability rather than an of EDF as a ‘Sustainability Sponsor’ of the
asset? Now, more than ever, is the time for London Olympics.
businesses to prioritise their impacts and
Shaun McCarthy actions, re-think their supply chains and begin
Director of Action Sustainability work on a ‘fruitful’ strategy!
and Chair of Commission for a
Sustainable London 2012 I was a member of the Sustainable Procurement
Task Force and a firm supporter of Sir Neville’s
recommendations. In the Flexible Framework,
we have a clear picture of what good
sustainable procurement practice looks like.
This was driven by good practice in business,
including BAA who attained second place in
the Business in the Community Index in 2006.
At the time, good practice in business was
based on a clear process to manage risk and
for reputation risk driven by stakeholders to
set the priorities. The Task Force published its
findings a year ago and the substantial part of
the work was finished 18 months ago. Leading
businesses have already moved the agenda
further. Marks & Spencer’s Plan A, for example,
is primarily driven by opportunity, not risk.
I had the privilege to share a conference
platform with a senior M&S manager recently.
He was challenged by a member of the
audience to say if this was a marketing led

3. Directions Monthly July 2007 Issue 14
❝
The economic muscle of the consumer purse is able
to fuel change. Firms must ask how fit is our supply
chain and how are we communicating this externally
and internally. But this is all obvious isn’t it? So why
❝
are businesses so slow to take it on board?
Where does this leave the Public Sector? chain and how are we communicating this We all know the managers who go for the
With £150bn to spend each year through externally and internally. But this is all obvious easy things to achieve, make a name for
the supply chain, this should be a major isn’t it? So why are businesses so slow to take themselves, get promoted and leave the hard
force for good. There are some great it on board? things to their successor. But it is never us is
examples; the Environment it? It is always somebody else. Look in the
Agency is best practice, albeit Unfortunately the answer to the problem is mirror, what do you see…?
a bit bureaucratic; DEFRA quite complex, and requires organisations
are running hard to catch to assess their individual impact before If procurement fails to address the issue, the
up; the Prison Service they are able to tackle it and it takes profession will miss an opportunity to raise its
is showing vision with time and effort to change. own profile. It seems everybody is looking for
a call for a ‘Zero Waste low hanging fruit, however the sweetest fruit
Mattress’, a product Do you remember the old ‘three is often at the top of the tree. Believe me, it’s
that does not exist today envelopes’ story? It is about a manager worth the climb. Business needs to think
but with huge potential handing over his role to a successor. about a more fruitful strategy. The ice caps
(hospitals, hotels, homes?). He tells him he has left three numbered are melting now – we can’t wait for successive
Sadly this is the exception rather envelopes to open in sequence if things get generations of envelope preparers!
than the rule. I was recently bemoaning a tough. Sure enough, things get tough. The
large section of government to a trusted first envelope contains the message ‘blame
public sector colleague by saying “they me’ and the new manager pulls through. The
haven’t done anything, they have just written next says ‘blame the staff I recruited’ and this
a position paper”. I was reminded by my does the trick. The third says ‘prepare three
colleague that, in the public sector, they envelopes’. The point of telling this story is to
consider they have done something if they emphasise that change on this scale requires
have written a position paper. The complexity vision, intellect and, above all, courage.
between policy and managing a massive
❝
supply chain sometimes stifles creativity and
action. The central government response to
the Task Force was progress of a sort but weak
in many areas. The draft Local Government The culture of ‘low hanging
and Health responses are much better. But
why does it take a year? fruit’ and ‘quick wins’ is too
❝
commonplace.
I chair the Commission for a Sustainable
London 2012. The Olympics represent a major
opportunity to break new ground and set new
standards. The Commission will publish its
first report in the autumn but it is interesting
to note the Green Party Chair of the
Greater London Assembly, Darren Johnson,
congratulating the Olympic Delivery Authority
for their progress on sustainability, six months
after calling their efforts ‘Pathetic’. High
praise indeed from a traditionally critical area.
When we talk about sustainable procurement,
we are talking about the environment, wages,
working hours and the health and safety
conditions of businesses. The economic
muscle of the consumer purse is able to fuel
change. Firms must ask how fit is our supply

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Contact:
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lharrild@salterbaxter.com pathwal@salterbaxter.com
Tel: +44 (0)20 7229 5720 Tel: +44 (0)20 7229 5720
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