A new IBM consulting service can help clients establish sustainability standards--from labor practices, to safety, to the environment--throughout their global supplier networks.
The IBM Sustainable Procurement offering is designed to help clients define cost, efficiency and sustainability measurements and goals for their procurement activities. This covers all supplies, materials, ingredients, components, finished goods and services they purchase to run their operations and to develop, manufacture and deliver their own products or services. The offering then helps them understand current practices, and develop and implement strategies for measuring suppliers' compliance with sustainable procurement goals.
In a globalized economy, companies and government agencies can work with thousands of suppliers around the world. In addition to headline-grabbing problems that can arise -- faulty components, toxic ingredients, unsafe working conditions--gross inefficiencies and waste can proliferate in such complex networks, as suppliers operate to their own individual practices and guidelines.
But effectively managing those relationships through a comprehensive sustainable procurement strategy can provide significant business advantages, such as cost and efficiency improvements, better regulatory compliance, lower environmental impact and improved reputation with customers and other key stakeholders.
For example, according to internal IBM estimates 80 percent of greenhouse gas emissions associated with supply chain activities occur outside a company's or government agency's own operations. But establishing guidelines for energy use and monitoring performance throughout the supply chain can reduce greenhouse gas emissions from shipping finished goods by as much as 10 percent, with a corresponding savings in energy costs.
"Driving sustainability practices through a global supply chain provides the biggest opportunity for companies and government agencies to improve efficiency and reduce environmental impact on a large scale," said Eric Riddleberger, IBM's business strategy consulting global leader, who heads up the company's corporate social responsibility consulting efforts. "It creates a domino effect, helping all supply chain partners become greener, more efficient and economical, and improving their contributions to the communities and countries they operate in."
In addition, greater sustainability performance can enhance relationships with key stakeholders such as customers, investors, current and potential employees and, in the case of governments, citizens. For companies this can mean an opportunity to differentiate themselves from competitors, expand their access to new markets and tap new opportunities to grow revenue. For governments, it can mean better stewardship of public assets and revenue and enhanced service to key constituents.
The IBM Sustainable Procurement offering covers six main areas of CSR throughout the supply chain:
- Environment -- reducing energy and water usage, minimizing waste and the use of potentially hazardous chemicals and materials, increasing recycling and recyclability, and improving efficiency;
- Community -- ensuring suppliers support and contribute to the communities they operate in;
- Health and safety -- promoting safe workplace practices as well as ensuring safety in products and services;
- Ethics and financial accountability -- ensuring suppliers practice appropriate business ethics and adhere to applicable standards for financial accounting and transparency;
- Diversity -- encouraging diversity and inclusiveness throughout the supply chain;
- Labor practices -- ensuring suppliers adhere to local, national and internationals laws, rules and standards for labor practices.
This offering draws on IBM's own experience running one of the largest, most complex supply chains in the world, with 30,000 supplier locations spread out over more than 60 countries. IBM has established its own Supplier Conduct Principles outlining its expectations regarding working hours, wages and benefits, employee health and safety, nondiscrimination, communications, the environment and ethics.
For government organizations, the IBM Sustainable Procurement offering can help U.S. federal government agencies comply with Executive Order 13423 and Department of Defense Green Procurement Strategy guidelines. It is adaptable, however, for use at any level of government in any country.
The IBM Sustainable Procurement offering joins a growing portfolio of consulting services from IBM designed to help clients address CSR issues throughout their operations. It can be used in combination with those other offerings to provide a comprehensive solution based on each client's needs.
This portfolio includes: the CSR Assessment and Benchmarking Utility, the Carbon Tradeoff Modeler, Green SigmaTM, Environmental Product Lifecycle Management, the Supply Chain Network Optimization Workbench (or SNOW), Strategic Carbon Management, and the Public Sector Energy and Environment Diagnostic.
To listen to a podcast about IBM's new Sustainable Procurement consulting offering, go to: http://www.ibm.com/press/audio/SustProc.mp3
To learn more about IBM's green and sustainability consulting offerings visit: www.ibm.com/gbs/sustainability
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