News
 11.11.2007 - Press Release
Sustainable Development is a priority for 80% of Purchasing Executives
Press Release
PARIS, November 8, 2007 - In 2005, an initial HEC-ACA study concluded that Purchasing Managers were sensitized to the need to set up a responsible purchasing system, but did not know how to do it.
The 2007 study titled "The Development of Responsible Purchasing" evaluates the challenges involved with responsible purchasing, the competitive advantages for the companies, the obstacles to the introduction of such a program, and the solutions set up by companies to fix these problems. In particular, it analyses the indicators and tools that enable the rollout of these programs and extends the study conducted in 2005 to other European countries.
The main trends
- These days, responsible purchasing is number three among the priorities of European Purchasing Managers, far ahead of certain traditional buyer objectives.
- More than 80% of them consider this challenge a key objective, which shows an acceleration in the trend observed over the 2003-2005 period.
- Compared to 2005, Purchasing Managers now have a much clearer vision of responsible purchasing. They know the difficulties in implementing it, the potential advantages, and the possible solutions.
- Implementation remains a major problem. Only 1 Purchasing Manager out of 10 indicates having fully attained his objectives in responsible purchasing for 2007.
- 60% of companies indicate having achieved concrete benefits: They now cite operating benefits such as "cost reduction" (32%) and "risk reduction" (44%), rather than purely ethical benefits such as "it's good for the planet" (12%).
- The obstacles identified by Purchasing Managers are mainly technical: The lack of tools and the lack of clear performance indicators are the major problems, far ahead of organizational difficulties such as the absence of internal expertise or the absence of support from management.
- Performance indicators remain an essential problem, since the study pointed out a significant disparity in the indicators used today by companies to measure the progress of their Responsible Purchasing plan. The companies need "results based" indicators that evaluate the performance of the suppliers from the viewpoint of Sustainable Development and the efficacy of responsible purchasing.
- Management of supplier performance is by far the main process affected. Indeed, 80% of purchasing specialists indicate that it is a real problem. In addition, two-thirds of the companies acknowledge the need to apply this evaluation process to more than half of their suppliers.
- Consequently, the companies are seeking tools that would allow them to release themselves from the complexity of the responsible purchasing (CSR standards, multiple categories) using information technologies and data mutualization to cut costs.
"According to studies conducted on the same topic in 2003 and 2005, we note today a true acceleration in responsible purchasing practices, which is now reaching into all sectors of activity. The challenge for general management is going to be now to quantify the creation of value associated with better overall performance of the supplier portfolio, specifically relating to greater valorization of intangible capital," says Professor Olivier Bruel, Associate Professor, Coordinator of the MOSI Department (Management of Information Operations and Systems-HEC Group).
"Purchasing Managers indicate that now they want to take into account new environmental and social criteria. Ariba shares this vision and recommends integrating these indicators in the Spend Management tools already in existence, so that Sustainable Development becomes automatic for all buyers," says Charles-Henry Royon General Director Southern and Central Europe of Ariba.
"In matters of Sustainable Development, Purchasing Managers no longer ask "Why?" but "How and How much?" They stress the need to apply these policies to a large number of suppliers and purchasing categories. By creating the first database on the environmental and social performance of the suppliers, EcoVadis makes it possible to rollout such initiatives," comments Pierre-Francois Thaler, Founding Partner of EcoVadis.
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About Ariba: Ariba, Inc. is the leading provider of spend management solutions to help companies realize rapid and sustainable bottom line results. Successful companies around the world in every industry use Ariba Spend Management™ software and services. Ariba can be contacted at www.ariba.com.
About EcoVadis: EcoVadis offers the first solution for the evaluation of the environmental and social performance of suppliers, enabling large companies to integrate these new criteria into their purchasing processes. For this purpose, EcoVadis uses the On-Demand software and the mutualized analysis service covering 150 purchasing categories and 23 indicators (from "CO2 emissions" to "child labor"). EcoVadis solutions allow companies to reduce the risks of interruption of the supply chain and accelerate the introduction of their Responsible Purchasing program (www.ecovadis.com)
About the HEC Group: A leader in Europe, specialized in management teaching and research, the HEC Group offers a complete and unique range of academic programs for tomorrow's
decision makers: The Grande Ecole, Specialized Master's Degrees, MBA, Executive MBA, TRIUM Executive MBA, and the Doctorate. Created in 1881, today HEC
has 104 tenured professors, 3,000 students of whom 30% are foreigners and more than 8,500 managers and executives in training every year. In 2007, the Financial Times ranked the HEC School number one for Master in Management in Europe for the third consecutive year.
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