How Supply Chain and Procurement Can Align to Balance Profit and Purpose
As organizations work at making their supply chains more resilient, developing optionality without losing a focus on profitability is critical. At the same time, changes in the regulatory environment and the rise of sovereign supply chains – along with increased pressure from consumers and shareholders alike – are making ESG a top priority for business leaders.
Developing effective ESG practices is not just doing good for the world, when done right it is good for the business.
Coupa recently hosted a webinar featuring George Lawrie from Forrester on the ways organizations can accomplish the seemingly contradictory objectives of profit and purpose. Moderated by Ahmad Jiwani, Coupa’s Director of Product & Segment Marketing, I joined George in a discussion on this pressing topic.
George focused the webinar on three key areas: first, disruption and resilience, followed by how supply chain and procurement connect, and then concluding with the route to building a sustainable, resilient supply network. Some of the take-aways from the webinar include:
Alignment between procurement and supply chain teams is key
According to Lawrie – and substantiated by what I see in today’s environment as well – the key to accomplishing the dual objectives of profit and purpose requires tight collaboration and alignment between procurement and supply chain teams. Working together to manage supplier relationships and risk, and actively designing supply chain networks to explicitly factor in these objectives, has become critical to success.
For a deep dive into the ways organizations can balance profit and purpose,
listen to our on-demand webinar, Balancing Profit and Purpose:
How Supply Chain and Procurement Can Align for Success
Focus on supply network orchestration
Supply chain design needs to balance sustainability and working capital productivity, as the costs associated with inventory go well beyond holding costs. A focus on supply network orchestration — built upon creating a supply chain control tower that orchestrates forecasts, orders, carriers, and suppliers — can help you align resources, assets, and partners.
“The center of gravity of demand is constantly moving…that means you need to continuously re-design your supply chain network by which you anticipate demand and fulfill it.” — George Lawrie, Forrester
The design of your supply network is critical for achieving a meaningful reduction in your carbon footprint because supply chain related carbon emissions are on average 11.4 times greater than direct emissions for organizations. Therefore, it’s time to focus on building a network of sustainable suppliers rather than the traditional (or, already old-fashioned) approach of only focusing on “low cost” suppliers.
Artificial intelligence (AI) comes to the rescue
AI can help procurement and supply chain leaders by determining demand trends more accurately, automating tasks, prioritizing actions, and optimizing decisions, thereby transforming supplier value management. CPOs and CSCOs need to evolve their companies’ culture and processes to take advantage of new technologies like AI and new supply chain design tools.
Listen to the webinar to learn more about how to balance your organization’s purpose and profit.