UN Expert Meeting on Sustainable Public Procurement. Christopher Browne Procurement Strategy Manager

Transcription

1 UN Expert Meeting on Sustainable Public Procurement Christopher Browne Procurement Strategy Manager

2 Presentation Background Overall strategy Risk assessment Market appraisal Supplier development Conclusion

3 Our aim A better environment for England and Wales for present and future generations

4 Procurement in the Environment Agency

5 Agency Procurement: Key Facts Agency Operating Costs 1.1Bn Expenditure with Suppliers 600M National Contracts 400M Top 25 Suppliers 395M Top 500 Suppliers 470M SME Suppliers 135M Supply Chain Africa,Aust/ Asia, S. America 143M Contracts let per annum 750 Procurement Resource Organisation ISO 9001 and ISO people Accredited

6 Sustainable Procurement Our Approach

7 Philosophy Start simple, but make a start Learn from experience Continuous improvement

8 Strategy Model Resource Support Framework M aintaining Excellence StaffTraining & Awareness Risk Assessment & Action Sustainable Procure m ent Strategy S ustainable Procurement M arketing Organisational Values Integration into Procurement Process Supplier Management & Development Stakeholder Values

9 Our approach Risk assessment Environmental Developing World supply chain? Contract strategy Environment, social and economics Supplier Management and Development Environmental Social management Diversity Support to improve Raising Awareness

10 Risk Assessment Example using IT products

11 Procure m ent risk assessm e nt m o del Identification of Business Need and Assess against Waste Hierarchy High Level Business Risk Assessment High Level Sustainability Risk Assessment Assessment of Influence with Supplier Score risk, Supplier Influence & Map using Boston Matrix LOW RISK Identify main issues and integrate into the contract HIGH RISK More detailed risk assessment, rank, allocate and manage

12 Generic Risk Assessments and Product Fact Sheets Sand Gravel Aggregate Concrete Plastic Steel Wood Textiles Paper Glass Electricity Gas Oils Iron Copper Clay PVC Electronics Software Telecoms Machinery Janitorials Construction Transport Printing Photography Horticulture Lighting Paints Varnishes =Priority Action: Potential Developing World Supply Chain Adhesives Cables Degreasants Solvents People / Labour / Consultants

13 Life Cycle Inputs and Outputs - PC s Raw Materials Oil based plastic Electronic components Cables Rubber Manufacture Energy Chemicals Emissions Plant People Flame retardant and VOC Use Energy Noise Emissions Packaging People Disposal Non-biodegradable Leakage of heavy metals Noxious Fumes Li keli hood of Suppl y Chai n Enteri ng the Devel oping Wor l d?

14 Map Life Cycle to Key Impacts - PC s Aspect/ Impact 1 Resource use Raw materials/ pre manufacture Manufacture Use Disposal Comments Plastic based products Heavy and precious metals used in electronic chips Energy Energy use during manufacture and use Water Use in manufacture VOC Solvent use in Waste/End of Life issues Hazardous Substances manufacture End of life options upgradability or re-use preferable to recycling or disposal Use of solvents and other hazardous substances in manufacture Packaging Reduced packaging with delivery Noise Possible noise and air Developing World Supply Chain emissions during use Many raw materials orginate in dev world, often manufacturing in dev world and equipment disposed of Score Total score 17/36

15 Management Approach Impacts at Raw Materials stage, mitigate by: Specification, suppliers ethical supply chain management policy, systems, measures Impacts in Manufacture, mitigate by: Supplier selection, appraisal, suppliers own ethical policy, EMS, measures Impacts in Use, mitigate by: Specification, end user education Impacts in Disposal, mitigate by: Specification, supplier take back, end user awareness

16 Risk mapping - Boston Matrix Risk Strategic Security Tactical Acquisition Strategic Critical Tactical Profit Value 1.5M

17 What scope do we have to influence the supplier? Can we deliver change?

18 Attractiveness of business Are we a key client in the suppliers portfolio? Do we represent more than 0.5% of the suppliers turnover? Is the supplier operating in a saturated market? Are low switching costs present with this market? Are we easy to work with? Are we an intelligent client? Are we efficient in our business dealings? Do we pay on time? Are we open to change?

19 Assess the suppliers view Mar ket Growt h/attracti veness Courtesy of PM M S Consulting Group Development Nuisance Core Exploitable Relative Value of Business/ Market Share Greater Influence

20 Approach to the market If there is a high degree of influence with the market demand sustainable performance of both the suppliers business/ the product If there is moderate influence target requirements into a few key areas and explore development opportunities If there is low influence encourage the supplier to develop through differentiation and wider marketing

21 Supplier Management and Development Driving the sustainability agenda?

22 Twin track approach Supplier Assessment Top 20 suppliers are researched, leading to an environmental profile and director to director discussions Top 500 suppliers assessed on environmental, social and diversity standing Supplier Development Top 20, intense development, actions agreed and personal support provided Top 500, feedback given and CD training package covering environment and CSR

23 Key Supplier Development Construction IT Food Labs Labs Construction IT Construction IT Construction Construction Telemetry Water Treatment Construction Consultants Construction IT Telemetry Consultants Vehicles

24 Review of 500 Suppliers Assessed suppliers in the following areas: Operating Sector Turnover Size Environmental Policy Environmental Risk Assessment Level of Environmental Responsibility Assessment of Environmental Impacts Targets and Measures Public Reporting EMS Accreditation Management of Overseas Operations and Suppliers Working conditions Minimum age Equality Pay Union membership Policy and Effectiveness Diversity

25 Press Reaction:

26 Making a start on Sustainability Where are your suppliers Operating and Purchasing: Europe North America Asia Africa South America Australasia Targeted assessment and development

27 Environmental and Social Risk Second Tier Supply Chain ( 254M) 19% 48M 25% 64M 17% 43M Social Risk 12% 31M 15% 38M 12% 31M

28 Key Statistics 62% First Tier Suppliers are SME s 34% First Tier Suppliers have overseas operations 58% First Tier Suppliers have no policy for sustainable overseas purchasing Policies that do exist cover: Working conditions 20% Employee Age 12% Fair Pay 16% Trade Union 10% Natural Resource 12% Emissions/ Waste 10% Only 1 supplier complies with SA8000

29 Targeted Development - A Start? Identified the suppliers who buy from developing world continents Assessed their current policies and Identified weaknesses Inform our own policy development and resource planning Meet suppliers to agree development areas and actions for change CD ROM based education package to assist Targeted detailed supply chain assessment in high risk areas e.g. Sandbags, Jute

30 Conclusion

31 Conclusion Environment Agency leads good practice sustainable procurement practices within the United Kingdom Philosophy of start simple, but continuously improve Risk based approach delivers real benefits Manage key suppliers and drive the agenda Target suppliers who have the potential for social risks in the supply chain Make a start and learn from experience

32 More Information: This Presentation can be downloaded from: Contact: Chris Browne, Procurement Strategy Manager Tel: +44 (0)