The ins and outs of responsible procurement from an industry veteran.
This week we spoke with Alis Hemmingsen, owner of Responsible Procurement, a Danish procurement consultancy.
At Responsible Procurement, Hemmingsen works with firms of all sizes to support them in developing a responsible and sustainable procurement function – a tall order, to be sure.
How does she do it? Find out below…
Q) Although we have chatted before, we always like to begin with a bit about those we talk to. Can you describe your background and your professional experience?
A) I was a procurement professional for almost 15 years. I worked with spend-management and procurement transformation with Lego, Grundfos, Danfoss and with Odense University Hospital – some of the biggest companies in Denmark. What I learned in these companies I am now using in my own company to drive a sustainable agenda within procurement, with both suppliers and buyers.
Tell us about the work you do with Responsible Procurement. How and why did you start the firm? And, what kind of work do you do?
I help companies around the world with 3 things. The first is strategy and leadership – which could be anything from helping procurement develop a business case, policy documents or concepts for responsible procurement. It could also be tools and processes to support the implementation of those ideas. My second leg is advisory and hands on – here I help Responsible Procurement Champions, CPO’s and CSO’s in leveraging best practice, ensuring that their approach to Responsible Procurement is effective. My 3rd leg is capability and awareness building. This could be my game, classroom training or e-learning initiatives. Basically, I do anything that can help a procurement function implement and develop their approach to Responsible Procurement in an actionable way.
I started the company because I wrote a book about Responsible Procurement. Companies started requesting my expertise and then it took off.
At Procurify we’re fascinated with the ever-evolving world of procurement. You write extensively about the evolution of the sector, especially as it relates to leaders in the procurement field. Why do you view leadership as such an important factor in procurement?
The role of procurement is shifting. The volatility of markets, the speed of technological progress and the pace of change in both the economic and business environments will continue to rise rapidly. Procurement needs to adapt to it. It takes leadership.
As a result, product life cycles are getting shorter and market demands are becoming more and more unpredictable. This change presents the risk of missing an important technological trend. Furthermore, the threat of being commoditized becomes a substantial risk for every company, independent of where you belong to in the supply chain. Value chains are also become increasingly global functions, even for SME´s. Supply chains are becoming more complex every day in terms of the number of partners involved, and the quality and degree of interdependency between them. Innovation is therefore the key factor for competitive advantage and procurement plays a key role in terms of executing on it.
What is the Responsible Procurement Wheel? Can you elaborate on it?
The Responsible Procurement Wheel is a method that I designed because I wanted to have a framework to work from with my clients. An overview of the steps needed, the things to think about when designing the approach to Responsible Procurement – the things not to forget. What I normally do is use it as both a dialogue and assessment tool to show where the company is and where their ambitions could take them.
How did you design it?
It is a 6-step process. The steps are not linear, but rather a guide to “what not to forget.”
You’ve written about the importance of viewing the entire “lifecycle” of procurement. What does that mean? And, why is it important?
A lot of companies are talking about approaching Responsible Procurement with efficiency in mind. Also, procurement has a role in stewarding products, services and technologies from contract all the way through product design, manufacturing, transport, sale, use to end of life. Procurement has an impact and should be able to actively work with these “hot spots” with their suppliers. I have invented a method that can help procurement professionals:
- Understand the impact of decisions at each stage of the value chain by visualizing the “hot spots.”
- In collaboration with suppliers develop future design scenarios.
- Create the plans to minimize the impact: rethink, reduce, reuse and recycle.
- Spread and sustain the lessons with key stakeholders.
It should be a shared understanding that the product, its packaging and the related supply chain has to be viewed as single solution, not a sum of disconnected parts when it comes to reducing impact on the environment. A life cycle view can ensure that that the environmental burden is not inadvertently increased elsewhere in the life cycle.
What do you see as the critical issues facing the procurement profession in the near- or mid-term future?
The attraction of qualified people and, subsequently, their ability to network and collaborate with the right suppliers. Also, procurement’s ability to adapt to a new role as “business transformation” and “growth” specialists and generators.
What has the procurement profession historically done wrong?
Not enough focus on communicating its real value.
What role do you feel technology can play in the future of procurement?
It can empower the decisions and the relationship with suppliers and buyers.
Any final insights you want to share?
Make sure your approach is actionable, going beyond compliance. Make sure that the Responsible Procurement approach isn’t just a matter of reporting.