Incorporating Sustainable Development Behavior into Supplier Selection
by Larry Nitardy, ComAssist
Management Spring 2012
As we work to make our companies more sustainable, its necessary to evaluate not only ourselves but also those we select to help us achieve an improved triple bottom line. Our vendors and suppliers today will need to be collaborative partners tomorrow if we want to achieve more impactful financial, societal and environmental results.
To evaluate a potential sustainable collaborator, consider a teachable, measurable and repeatable process that outlines the questions and judges the responses. These might be the same guidelines used to drive your internal sustainable development efforts. When choosing sustainable development partners, consider the following issues.
Culture and Commitment
Look for potential suppliers that have an observable culture of sustainable development and continuous improvement. You should be able to witness their culture in action when dealing with company officials and representatives. Potential collaborators with a sustainable development culture do the following:
- Share their own sustainable development goals, including how they measure their own success.
- Promote sustainable development as a differentiated value, through both sustainable products and sustainable enterprise practices.
- Explain the improvements they are making in their marketing and selling efforts and how those improvements will help achieve our own goals.
- Ask about our sustainability goals and strive to find ways to help us achieve them.
Once we see that our potential partners have a culture of and commitment to sustainable development, we can identify and evaluate a series of stewardship behaviors that help judge potential collaborators. Partners who currently exhibit stewardship behaviors are the most capable of helping us maximize our sustainability results while minimizing our investments and risk. Stewardship behaviors by which collaborative partners can be evaluated include the following:
1. Environmental/Planet Behavior
Touch: Normally, less touch means a more sustainable position for all parties. Establish valid goals for the behavior of touch, and then ask questions about how potential collaborators can help you achieve them.
- Is this supplier working to reduce the number of times I have to touch its product, including packaging and waste disposal?
- Does this supplier help me reduce the usage of this product or service over time, as well as providing the most relevant, reliable product or service today?
- Does this supplier have or promote more than one utility for this product or service? Can one intended touch give multiple benefits?
- How does the product or service touch our air, water and other natural resources?
2. Societal / People Behaviors
Teach: Collaborative partners should educate and coach your team on the environmental, social and profit aspects of their products or services. Determine the impact your potential partners have on teaching your team by asking the following:
- What is the general level of teaching being provided by this supplier, both in working with the product or service and its non-work value?
- Is that supplier going to help optimize our triple bottom line by taking on some of the burden of improving and increasing knowledge about the impact of using its product or service?
- Does it invest in our teams performance with education that increases productivity and reduces negative impacts?
- If you ask the supplier to do more training, is it able to do it at no increased cost to you?
Collaborative suppliers need to be prepared to teach your teams about their products sustainability value and encourage the use of materials and services in the best ways to achieve triple bottom lines. Over time, teaching should become like price, service and quality a basic qualification to becoming a collaborative partner.
Treat: When evaluating treat, we are basically looking at how a product or service meets all environmental, health and safety regulations. But ultimately, all of us will benefit when we favor companies that go beyond the basic requirements and show propensity toward, and attention to, not only meeting regulations but reducing personal, community and environmental risk at a fair cost to us. Consider the following:
- Does this supplier have a story that creates a sense of pride in its products or services attention to the human condition?
- Is the supplier continually working on its contribution to the value of our own products and services impact on the triple bottom line?
Strong sustainability collaborators will show very visible signs that they treat sustainable product development and the triple bottom line improvement seriously in their content management and story telling. They exhibit pride in their health and safety performance and talk about how they use it to their advantage.
Tout: Human resource departments see that the best new talent wants to work for the most sustainable companies, and they want to know about the sustainability involvement of the employees. Potential partners can help achieve an attractive workplace. We might want to know the following:
- How can this supplier help me tell our sustainability story to our current and future employees and the community in general?
- Specifically, how does choosing its product or service help us build and tell our sustainable development story?
3. Financial/Profit Behaviors
Time: Our best partners will pay attention to time behavior in the development of their products, helping to minimize the time their product is in our supply chain and maximize the margin gained from that time.
- Can they explain specifically how long their product or service will be in our supply chain?
- Do they have the capabilities to help us shorten that time?
- What is the life cycle prior to our use of the product or service?
- What is the life cycle afterwards?
- Will this supplier reclaim ownership of the residue or recycle value of the product?
- Better yet, can this supplier help to find a way to get a secondary or tertiary use out of the product?
Talent: When considering talent as a behavior, consider the contribution of intellectual property and its value. The best collaborative partners will have a plan and execution steps in place to increase the value contribution of their product and service, as well as improve its impact on the world around us.
- What talent does this supplier bring to my sustainability effort?
- Is its product or service leading-edge?
- Does it invest in understanding the life cycle impact of its offering?
- Are alternative resources being considered?
Treasure: At the end of the day we all need collaborators who have our financial well-being in mind. Fundamentally, the most valued collaborators must have the potential to help lessen our unit costs over time, while achieving a higher sustainable value-add to our stakeholders. Think about these aspects of treasure:
- Does this potential supplier understand our cost structure and the impact its product has on it?
- Does it have a plan to reduce costs and increase unit value over the planning period?
- Does it strive to reduce our environmental impact, improve our societal contribution and make a direct contribution to our financial bottom line?
Our partners of the future will need to be fully integrated functions of our value chain. Treasure may be discussed last on this list, but its most always first on our minds. The number one goal for for-profit organizations should always remain achieving a level of profit that sustains our existence.
In sustainable development, it can be said we need to Begin with Never Ending in Mind© a goal of maximizing our present while preserving a future for those who will follow us. If that is true, it certainly follows that stewardship behavior is what will achieve that goal. The behaviors reviewed can be evaluated and measured, not only in our supply chain but in manufacturing, marketing and logistics as well. Maybe the best way to evaluate our potential partners is to look at them just as we would look at ourselves by asking, How are we behaving as a sustainable enterprise?
Larry Nitardy is founder and president of ComAssist, a boutique commercial assistance practice providing coaching, consulting and contracted services on both qualitative and quantitative methods to grow revenues, increase margins and map and execute sustainable development. He can be contacted at firstname.lastname@example.org or by calling 423.312.3439.