February 24, 2021 Taylor Fox

Sustainable Procurement & Product Sourcing – Why It Matters and How It Benefits Businesses

Wee Guides

Why is sustainable procurement the need of the hour?

We are witnessing a growing trend of sustainability becoming an integral part of business strategies in modern times. More and more organisations are working towards improving the quality of their business through authentic and holistic approaches. A manufacturing strategy that considers people’s health, planet, and profit will reveal market opportunities and ensure its future in the long term.
However, manufacturing ethically while simultaneously keeping the cost low possesses a significant challenge.

Want to know how organisations are integrating sustainability into the procurement of goods and services and the challenges they face? Read on! 


What is Sustainable Procurement?

Let’s get into it.

Sustainable procurement is the process of sourcing goods and services responsibly while maximising the positive outcomes for the organisation and the economy, environment, and society.
This process is led by the organisation’s overall manufacturing strategy and requires organisations to re-think the traditional definition & ways of manufacturing.

The term “procurement” held an old meaning for manufacturing, but in today’s manufacturing environment, with its evolving and complex supply chain needs, this concept has grown in importance.

The current market behaviour is to hold companies responsible for manufacturing and suppliers with transparent practices, while also ensuring fair pay to workers and using renewable or recycled materials, reducing waste, and saving energy & resources.

Consumers’ buying habits have evolved due to higher education & care levels than ever before. People are engaging politics, conservation and the environment with their wallets.

It’s time for businesses to either develop or diminish.


Pressure for Sustainable Procurement in Supply Chain

We all know it by now – the world is changing.
Pressure on companies to improve sustainability practices & sustainable product development is growing alongside increasing consumer awareness of human-induced climate change and its impact on future generations.
With increased environmental concerns, consumers are demanding greener manufacturing processes that will mitigate their ecological footprint.

Responding to these challenges, many companies are changing the way they do business.
They have begun implementing initiatives that align manufacturing operations with their sustainable sourcing strategies, integrating sustainable practices into all aspects of the supply chain.

As consumers’ chants grow louder for more ethical products & brands, companies will be required to innovate to meet buyer expectations or fall into the abyss of irrelevance.


Challenges Faced by Sustainable Procurement 

As exciting as the push towards ethical and sustainable manufacturing is, it isn’t without its challenges.

As such, we at We Assist Co have identified 3 key areas that hinder sustainable procurement practices:

1. Budget 

Whenever an organisation shifts from traditional to sustainable models, they require money.
It isn’t cheap to invest in new technology and train your employees.
Additionally, it might be easier for a big brand to plan, invest, and execute sustainable procurement but unfeasible for a smaller business with limited resources. 

2. Overseas Quality Control 

Sourcing products overseas has been an ideal solution for brands to reduce manufacturing costs, but it often gets hard to monitor the working conditions of an overseas supplier. 

Let’s say your business is located in Australia, and you choose product sourcing from China. You can’t guarantee that the labourers are working in a humane and ethical environment without physically overlooking the manufacturing process. 

3. Limited Understanding 

Sustainable procurement requires an understanding across the organisation, including of the suppliers and stakeholders.
Existing supplier relationships need to be reassessed, workers experience cultural change, both of which can lead to a complete corporate upheaval.

Most businesses are unaware of the intended goals and desired outcomes of sustainable procurement. In such scenarios, the management must set up training programs and workshops to enlighten and empower current employees. All of which will cost time and resources.


Motivators for Sustainable Procurement 

No doubt, a company faces many hindrances while implementing sustainable procurement.
Yet so many organisations have shifted their focus on global product sourcing more ethically and sustainably.

Below, We Assist Co has identified a few of the most prominent driving forces for the sustainable procurement movement:

1. Long Term Cost-Benefit 

Even though you cannot quantify an immediate ROI with sustainable procurement, you can guarantee a significant cost reduction in the long haul. This cost-benefit will be directly linked to reduced energy costs, consumption, and social and environmental compliance costs.

2. Risk Reduction

Investing in sustainable procurement reduces the risk of economic costs such as noncompliance with evolving industry regulations. It also ensures that you work with genuine suppliers who don’t use corrupt practices like child labour, unfair wages, etc. 

3. Revenue Growth

Businesses that practice sustainable procurement see an increase in their total revenue. This growth can be due to a number of factors such as increased income from recycling programs, increase in your profit margin, and brand equity. You can also expect revenue growth from an improved brand reputation that attracts more customers.


These are incredibly enticing benefits to businesses that are willing and able to remain at the forefront of consumer needs and adapt to an ever-changing global market. Sustainable procurement and supply chains are not without their challenges, but challenges can be overcome and make your business stronger than it ever was.

We Assist Co specialise in assisting businesses of all sizes to establish ethical and sustainable supply chains, resulting in products that are both good for the planet and good for your revenue.


The Bottom Line.

We need to acknowledge and support sustainable product development & procurement for a better future!

Curious to find out how you can make your product or supply chain more profitable and more sustainable? Use the contact form below to get in touch for a complimentary procurement consultation!


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