In many fast fashion organisations, the perception of buying is all about getting the lowest cost product, minimum quality, as quickly as possible, to meet an unpredictable demand. It is about minimising financial risk and making as much money as possible in the short term, with little regard for the longer-term impact on waste, environment, or well-being of people. In other words, this type of procurement won’t build resilience, sustainability, and profit over the long term.
Organisations that care about sustainability and the impact of their business on the environment and the people who work throughout their supply chains, can really harness a procurement opportunity to bring about big break throughs in sustainability, that raise the bar in the Fashion Industry and which also deliver profitability. After all, sustainability is profitability in the 21st century.
Let’s face it, the UN sustainable development goals for 2030 can only be achieved by working together differently and by not being only about profit. The recent IPCC report from the UN has issued a code red alert on climate change. Key people and organisations with influence (Ellen MacArthur Foundation, Wrap UK, Fashion Revolution, Business of Fashion Sustainability Index and the media amongst others) name and shame the big players in the fashion industry for the waste, pollution and social inequality they engender. Statements around the need for a circular economy say that the Fashion Industry needs to change and do things differently. The hard part is working out what exactly needs to be done so differently, without breaking the business model entirely. There are so many other factors that a business needs to consider in addition to sustainability. What is really needed is a step by-step transition into a transformed state of sustainability. And a sound procurement strategy is one of those steps.
Personally, my supply chain and procurement experience are twenty years in the making and I take inspiration from Stephen R Covey, who in his book “The 7 habits of highly effective people” talks about interdependent relationship between people who have a win/win attitude, an abundance mentality, the ability to listen, who are able to value differences within a team or partnership. For me sustainability in Fashion is all about finding those solutions that we never thought of before; by being able to see things differently, by partnering with those who do some things much better than we ever could do them and by putting those partners on a level playing field. A partnership based on trust and determination to continually challenge the status quo to uncover hidden synergies, which are so much more rewarding than the usual compromise. Such partnerships are worth striving for, are worth the hard work and effort to find, the time to build and the attention to nurture over the long term.
Doing things differently means changing our paradigms, like changing how we work with suppliers, like seeing vendors with shared values as strategic partners, who can and want to help progress a common agenda.
I have seen many organisations put enormous pressure on themselves to try and answer all the questions alone; to innovate and find new packaging materials, to source sustainable fabrics from unknown entities and try to optimise product flows as best they can. However, what about doing things differently? What about putting the question out there as a competition and letting the best potential innovator, partner and change maker come back with their proposals and suggestions. Throw in everything that you dream of, even the really difficult things and see what comes back and at what cost.
Of course, many would argue that all sounds great and utopic, but that the reality is quite different. How do you consistently form strategic partnerships overtime, when faced with product range changes which lead to frequent supplier changes? How is it possible to make suppliers reliable when, clearly, they haven’t shown themselves to be so in the past? (The global pandemic hasn’t helped either)
Similarly, how do you work out where best to locate your warehouse and how do you find out who is out there to help you do it? It is a risky business and how do you know that any new partner is trust worthy?
We come back to the false perception that procurement is all about short term profit maximisation. Well actually no, it doesn’t have to be. Procurement is more about finding the most sustainable partners, with shared values who have technical capability that can truly enhance or contribute to what your business is trying to do over the longer-term. It is about multiyear partnerships, rather than a quick fix for this season/ year.
A well-articulated, properly planned and thoroughly executed tender process can shed enormous light on some of your biggest headaches and lead you into some of the most valuable partnerships your business has ever made. In fact, sometimes it can even affirm that the suppliers you already have, have in fact more potential than you thought, but you just hadn’t yet tapped into their capability.
Case study: We helped a renowned brand for being different and doing things sustainability, in the Beverage Industry, adopt a more strategic approach to their buying by leveraging their packaging volumes and to tap into innovation opportunities that they could never have done before without this approach. Not only did they get best value for money and simplify their ways of working, but they also secured enough supply of recycled PET to meet their 2022 goal of all bottles being 100% renewable (made from a combination of recycled and plant plastic)
For us at Altrubi, procurement is essentially all about asking the right questions and getting the right feedback and evaluating all intangible as well as tangible aspects as fairly and objectively as possible. We bring added value by focusing on
- A solid evaluation not all just about money, but also assessing intangible values such as business risk, sustainability, and innovation
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- A fair and transparent contracting process
- Internal alignment across your business of vendor expectations. This is important when there are several departments working with a single provider at different points in the product development process.
- For operational contracts a clear scope, well-articulated expectations which can be measured and monitored.
- A cost structure that allows you understand and track your costs
- An embedded process for ensuring a continuous stream of innovation and sustainability initiatives.
Most importantly of all it is about finding the common attitude of win/win and abundance which are the foundations to building a successful partnership and building synergies together, that just wouldn’t have been possible for either party on their own.
Sustainable Procurement is one step in making your business more sustainable. To find out more about the 4-step AltrubiTM Circular Supply Chain Method, download a copy of our brochure here.
Alternatively, why not take our 2-minute Scorecard that delivers a customised report for your business. Find out if you are outperforming your competitors through your supply chain here.