Digital supply chain processes can produce results not only by dematerializing the process and making it more efficient, but also by having a positive impact in the ESG (Environmental, Social and Corporate Governance) arena.
The importance of sustainability has grown steadily in recent years, and the pandemic has further renewed the focus on this issue, particularly considering its implications for procurement.
On the one hand, the need to ensure continuous supply during the emergency may have led to the sacrifice of sustainability related criteria in favor of tactical procurement, but on the other hand, the opportunity to rethink and rebuild procurement practices opened up by the crisis now makes it possible to provide new value and substance to these issues.Moreover, further analyses and studies concluded that companies that perform at a high level on sustainability issues have suffered less from the effects of the crisis and appear to be in pole position in the current recovery phase.
The sustainability concept has three dimensions:
– environmental: reduction of pollution and other negative externalities of the production process and distribution;
– social: respect for the rights of workers operating at all levels of the value chain;
– economic: obtaining the best quality/price ratio.
Processes digitalization related to the procurement cycle can produce positive impacts in all dimensions of sustainability, because it allows to:
1) reduce the consumption of material resources in the procurement process;
2) remove barriers to the participation of the best companies;
3) increase the quality of procurement strategies;
4) simplify the implementation of stimulating innovation procedures.
The first point regards the impact related to the consumption reduction of material resources. The use of a digital platform located on the internet allows the total dematerialization of the process, annulling the tenders imposition consumption of paper and limiting the costs of archiving.In addition, remote collaboration eliminates the need for physical travel, reducing pollution.
To increase the sustainability purchases demand, to put in competition the best economic operators, a platform of modern and multilanguage eProcurement concurs above all to quickly extend the basin of the suppliers at a national and an international level.
Additionally, eProcurement enables the possibility to qualify and evaluate companies in a more complete and structured way, thanks to the integration of ESG sustainability ratings and the increase of visibility on companies at various levels of the supply chain.
Technology also simplifies the adoption of best practices in each process, improving the quality of the results.
For instance, the application of sustainability-related requirements, such as Minimum Environmental Criteria, to a procedure is simplified through the use of libraries of standard requirements, which can be automatically associated with tenders in relevant product categories.
Furthermore, eProcurement makes it possible to simply extract useful information from the large amount of managed data, identifying, for example, which tendering strategies have been successful.
In addition, it enables the simple derivation of useful information from the vast amount of data managed, identifying, for instance, which tendering strategies have achieved the best results from a sustainability point of view.
Finally, the procedures capable of achieving the most significant impacts (e.g. social) are the “innovative” ones, where competitors are required to propose solutions and processes that did not exist before.
eProcurement facilitates the realization of these complex initiatives, favoring and simplifying the collaboration between buyers, especially in the phase of definition of the needs and the strategy of the tender.
The aggregation of the purchasing needs of different companies therefore enables the acquisition of the negotiating power necessary to stimulate the market to make the important changes related to sustainability that we need today.