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environmental social and governance

ESG and Your Supply Chain

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Why You Should Incorporate ESG Into Your Supply Chain

 

Companies that incorporate environmental, social and governance (ESG) factors into business practices can not only create more ethical companies that align with core values, but they can also enjoy a potential increase to the corporate bottom line. That’s because customers, employees, investors and other stakeholders increasingly want to associate with companies that consider ESG.

Taking these factors into account can unlock new opportunities in areas such as hiring by expanding talent pools to include diverse candidates; marketing by showcasing environmentally-friendly products to customers; and finance by making it easier to attract equity investments or take out loans by demonstrating sound governance. Becoming more ESG-focused can also extend beyond internal operations to include your supply chain.

As the United Nations Global Compact notes on its site, “A company’s entire supply chain can make a significant impact in promoting human rights, fair labour practices, environmental progress and anti-corruption policies.”

Aligning Values With Finances

While many companies may be open to incorporating ESG factors, they may think that doing so requires sacrificing profit. However, the tide is increasingly turning towards consumers seeking out ESG products and services, and many are willing to pay a premium.

For example, between 2013-2018, “products marketed as sustainable grew 5.6x faster than conventionally-marketed products,” according to an NYU Stern School of Business Center for Sustainable Business and IRI®study.

Moreover, 44% of Millennials believe that companies they do business with should always be environmentally-friendly, even if that causes a small price increase, according to a survey by Markstein, conducted by Certus Insights.

One way companies can improve their standing in this regard is to seek out vendors that align with ESG factors. Doing so can even be helpful for companies that sell services rather than physical products. For example, an accounting firm that uses environmentally friendly suppliers for office supplies, lighting, trash disposal, etc., may be able to more easily market itself as a green company and appeal to younger customers who want to work with a firm that goes beyond just focusing on finances.

Similarly, working with diverse suppliers such as women-owned, veteran-owned or minority-owned businesses can improve the social responsibility of a company by demonstrating inclusion and equality. Doing so is important considering that 70% of consumers “want to know what the brands they support are doing to address social and environmental issues,” according to the Markstein and Certus Insights study. And most of these survey respondents agree that social responsibility expectations apply equally to small and large companies.

Expand Your Supplier Network

Incorporating ESG factors into your supply chain not only helps attract stakeholders to your business, but looking at suppliers with this new lens can also expose your business to vendors that you may not have otherwise considered.

For example, looking at governance factors like the composition of a company’s board of directors or looking at how a supplier treats its own employees may cause you to spot risk factors with the vendors you currently work with. From there, you may decide to seek out new suppliers that stand out for incorporating ESG into their businesses, and these companies may be able to work with you on related initiatives like improving the sustainability of the shipments you receive from them.

One way to source ESG-focused suppliers can be through the consulting services or procurement platform of Premikati, an SAP Ariba™ partner and a certified Women’s Business Enterprise National Council (WBENC) company.

To learn more about how Premikati can help your organization incorporate ESG into your supply chain and improve your overall procurement, please get in touch with our team.

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Cut Procurement Costs – Not Quality

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A New Year’s Resolution to Cut Procurement Costs, Not Quality

 

Many people take on personal new year’s resolutions such as to lose weight, but what’s often more important than the number on the scale is someone’s overall health quality. Similarly, many businesses want to cut costs, but focusing just on reducing expenses may not be the most sustainable way to grow overall.

For example, switching to a vendor that supplies lower-quality products, such as for IT devices, may reduce costs in the short-term, but if those devices break down faster, it can cost more overall to repair or replace them.

Thus, companies looking to save money in 2020 should make a new year’s resolution to cut procurement costs without cutting quality. To accomplish this task, businesses can leverage:

    • Purchasing Power: Either by consolidating spend with fewer vendors or by leveraging group purchasing organizations, companies can often obtain a discounted rate for purchasing the same products and services. For example, making tail spend purchases through a B2B marketplace can enable businesses to obtain better rates from suppliers based on the combined spend of the marketplace’s multiple clients. If a small or medium-sized business tried to negotiate rates based on just their own spend, they would have less leverage than a marketplace has when setting rates with suppliers.
    • Spend Insights: As companies improve their ability to track spending, they can more easily identify pure cost-saving opportunities that have no bearing on product or service quality. For example, using spend insights to identify erroneous purchases, such as incorrect pricing or accidental orders, allows companies to reduce costs without affecting any other areas of their business. Similarly, spend data may show that companies are going over budget with purchases that do not add much value. From there, businesses can implement stronger cost controls so that unnecessarily expensive purchases do not go through.
    • Productivity Gains: In addition to the direct cost savings that can come from negotiating better rates and cutting waste, businesses can also save on expenses and potentially increase revenue through productivity gains. For example, if a business can process orders and invoices more efficiently through a procurement marketplace, they may be able to reduce the costs of using a third-party accounts payable provider. Moreover, freeing up employees’ time to focus on more revenue-generating tasks can help companies grow, without adding expenses.

Start Saving With Premikati Marketplace 

To simplify tail spend purchasing and cut procurement costs without hurting quality, businesses can turn to Premikati Marketplace, which runs on SAP Ariba™ Buying and Invoicing. The platform provides an easy way to access great pricing on quality products and services, while also allowing businesses to implement cost controls, gain rebates and streamline the overall buying process. Altogether, businesses can reduce tail spend costs by around 30% through this marketplace.

To learn more about how Premikati Marketplace can help you achieve a new year’s resolution of cutting procurement costs without cutting quality, please get in touch with our team.

holiday gifts for suppliers

Top 4 Best Holiday Gifts for Suppliers 

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Top 4 Best Holiday Gifts for Suppliers 

We’ve talked before about the importance of nurturing good relationships with your suppliers in the past. During the festive season, why not reach out to your suppliers with a little thank you for all of their hard work to show them how much you value their contribution to your business? 

Here are four great gifts for suppliers to show your gratitude this year: 

(By the way, we aren’t affiliated with any of the products below, just lots of great suppliers!)

Wireless Headset

Suppliers tend to spend a lot of time on the phone. Free up their hands so they can stretch their legs and grab a cup of coffee while on calls with this rechargeable wireless headset. Relieve some neck cramps and offer some healthy benefits that may even help them reach their New Year’s resolutions. Supply chain and squats, anyone? Plus, it offers a mute button and noise canceling. It even works with Skype. Their shoulders are sure to thank you. Amazon link here

Coffee

Sweet, sweet caffeinated magic potions that make the work happen. Few people in business will pass up a good cup of joe, so send them a box with some nice beans to give them a little boost through the season. This holiday pack offers several seasonal flavors—but it’s whole bean, so you may want to send a grinder like this one too. Something about a freshly-ground cup of coffee always makes the workday feel a little more manageable. If you really want to go all out, here’s a sampler from the same company with coffees sourced (haha!) from all around the world. 

Wrist Rest

The one thing suppliers may actually do more than talk on the phone is use their computers. Offer them an ergonomic boost to help their wrists, elbows, and shoulders with this memory foam desk set that supports their hands on both their keyboard and mouse. It’s filled with memory foam, so it may remind them of a more relaxing place (ahem, like at home in their bed), and their stress can melt away—don’t worry, the coffee will keep them awake. Here’s one with divets for airflow on Amazon.

Office Snacks

It’s how long ‘til lunch break? Ward off hunger (and hanger) without dismissing health goals many people will set for the New Year. These tasty snack packs come in delicious flavors like honey mustard, chocolate banana, and espresso, but are also portion-controlled at 130 calories each and protein-packed, so they last until lunchtime.

In case you’re wondering about some of the implications of sending gifts to your suppliers over the holidays, here are a few other helpful tidbits of information: 

  1. A guide on the etiquette of giving gifts in business with important points to understand, like corporate policy limitations.
  2. Information about the tax benefits of giving gifts in business.

Even if you opt not to send a physical gift to your suppliers this year, you should take the time to send each and every one of them a heartfelt thank you and well-wishes for the holiday and the new year. Remember, without your suppliers, you don’t have a business, so show them that their efforts—and they as people—are meaningful to you. 

 

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