17 September 2013

Assessing risk and spend in supply chains

ECO-Buy, a not-for-profit organisation in Australia, has written a short guide to risk analysis in supply chains. Reacting against procurement decisions which can have environmentally and socially harmful consequences, the organisation has developed a simple chart, with the amount of risk and spend on the axes.

One of the outcomes that they have noticed continually is that reduced spending is accompanied by better outcomes for the environment and for budgets. ECO-Buy outlines several different strategies to work with combinations of high and low spend and risk. This can include working in partnership with suppliers to improve their sustainability, looking for other, more sustainable alternatives, setting evaluation criteria, and setting pre-qualification requirements.

Although this isn’t an exhaustive guide, it demonstrates that there is no one strategy that can be used to tackle unsustainable or socially damaging supply chains, where different inputs and outcomes exist. It entails a considered approach to sustainable procurement, and shows how systemic change can help to make this a reality. Approaches like these can be found in the resource centre.

For more information, click here.