Guest Post by Robert Pojasek (first posted on CERM ® RISK INSIGHTS – reposted here with permission)
Many larger companies have three critically important operations: organizational sustainability, procurement, and supply chain management. IN most companies, these operations are managed separate from each other, and their operations are not directly influenced by international standards.
Organizational sustainability works to improve all the operations of the company. However, these operations are managed internal to the organization. There may be a sustainability plan for the organization, but it is not used in all facilities or in the same manner for many of the facilities. The corporate sustainability program creates its own program based on how the sustainability manager works with operations. This will be coming to an end as the International Sustainability Standards Board (ISSB) is preparing to release mandatory reporting to provide information to the capital markets.
Procurement is meeting with other companies to see how their materials may offer some benefit to the items being produced in the organization while saving money and improving quality by the company that controls the procurement function. Sustainable procurement represents an opportunity to provide more value to the organization by improving productivity, assessing value and performance, enabling communication between purchases, suppliers, and all stakeholders, and by encouraging innovation.
Supply chain management enables the suppliers to use organizational sustainability and to have a good sense of the needs of procurement for the companies that have detailed specifications of the products and services that are offered by the supply chain.
There is a fourth element known as collaboration. Regardless of industry, or other factors, a well-conceived collaborative relationship will follow a set of common principles. Any collaborative lacking in these principles will most likely experience challenges and reduce the likelihood of success. The essence of collaborative working enables organizations to achieve greater results than having the groups work independently. Continual focus on adding value will open the awareness and ability to make use of value-enhancing opportunities within existing and through new collaborative relationships. The creation of collaborations is an interactive process where these principles will evolve through the life cycle of a relationship.
This information is applicable to any organization, public or private, regardless of its size and location. It is intended to be understood by any stakeholder involved in or impacted by procurement decisions and processes. Implementation of these programs must consider the context and characteristics of each organization. The adoption of this information by large organizations promotes opportunities for small and medium-sized organizations in their supply chains.
While this blog principally addresses the management system of an organization, it also recognizes that effective collaboration requires two or more organizations to engage together and that management systems need to accommodate the joint activities of all the participants.
References.
Pojasek, R.B. (2017). Organizational Risk Management and Sustainability: A Practical Step-by-Step Guide. as found in https://amzn.to/33klga3.
ISO (2017). Sustainable Procurement – Guidance. As found in https://www.iso.org/obp/ui/#iso:std:iso:20400:ed-1:v1:en
ISO (2019). Principles for successful collaborative business relationship management. As Found in https://www.iso.org/obp/ui/#iso:std:iso:tr:44000:ed-1:v1:en
BIO
Robert B. Pojasek, Ph.D. is the Managing Director of the Center for Corporate Performance & Sustainability. He consults to companies seeking to upscale their sustainability programs (at the Corporate level, operating facilities and supply chain) using the ISO “high-level structure” and the ISO 9004 concept of ““Sustained Success.” Dr. Pojasek has been teaching organizational sustainability online at Harvard University for the past 18 years. He has written two textbooks on this topic: “Organizational Risk Management and Sustainability: A Practical Step-by-Step Guide” and “How New Risk Management Helps Leaders Master Uncertainty.” The Center’s staff is completing a book on “Mastering the Alphabet Soup of Sustainable Development: A leadership Guide.” You can learn more about the Center’s activity on its LinkedIn website: https://lnkd.in/etuG7t4
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