Local supply as an example of more responsible procurement
I was interested to see the responses to my blog a few weeks ago. My intention was to use the example of local supply to illustrate the changing nature of our profession and the need to consider impacts beyond the traditional cost/time/quality equation. From the feedback I received, I obviously didn’t get the message across very well, so I will try again.
The responses were along the lines that it is a buyer’s duty to get the best price and value regardless of any other consequences. My example of a plasterer from Powys, Wales, doing work in Pangbourne, Berkshire was met with a resounding “so what?”
The purpose of the blog was to say that buyers in future may be required to consider some wider consequences of their decisions. For example, taking a plasterer from Powys to work in Pangbourne has an adverse impact on carbon emissions, air quality, traffic congestion, road safety and the well-being of the plasterer. Of course one plasterer makes little impact but if you multiply this by millions of contracts all over the country the impact is massive.
The price that a plasterer is prepared to work for is variable and negotiable, the results of travel are less flexible. It seems that some buyers consider this to be somebody else’s problem.
My other point was about lack of good information. The construction industry is nomadic by nature and contractors do not necessarily have good information about competitive local services, so they stick with the suppliers they know.
Other professions are taking these issues much more seriously in the interests of sustainability, cost and long-term competitiveness. Other professional institutions such as the Institution of Civil Engineers have this at the top of their agenda, the car industry is competing around emissions, and retailers are all trying to out-green each other. My fear is that the procurement profession will be left behind if we continue to take such a narrow view of buyers’ responsibilities.
Travel for trades is only one example of the wider impact that procurement professionals will need to consider in the next 10 years. You may want to ponder this next time you are sitting in motorway traffic going nowhere: Are you part of the problem or part of the solution?
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We take this very seriously in the Procurement Service here at Durham University and even won a national award for Sustainable Procurement based on our work with developing local suppliers. We are constantly striving to find new and innovative ways of achieving efficient and effective, value for money procurement.
Shaun. Two points. One: won’t the market take care of it? Two: what do you do proactively to reduce your carbon footprint? For example, if you were asked to undertake a lucrative consultancy contract 400 miles from your home, would you refuse it on the grounds of environmental responsibility?
Ian, I’m tempted to answer you second question: If I were Shaun, that lucrative consultancy should include a nearby accomodation for me & my entire crew till the service/work is completed. This will reduce my contribution to reduce mycarbon footprint by avoiding frequent travels from my original place of residence to the 400miles away.
The beef is that, giving the opportunity to choose between greening & carbon footprint reduction, none of us will be ready to spend a penny to save the future; which leaves us all in a myopic perspective.
This will be my first consultancy/advice for free in the bid of saving the environment.
Any comments, please let it flow.
Augustine. Thanks for the free consultancy advice – the planet thanks you. So will the market take care of it? What if the consultancy requires you to visit one day in every ten only? I’m inclined to agree we take the money and think of the planet later. How do you see this Shaun?
I’m unconvinced by the notion that we should encourage local firms artificially. Surely favouring local suppliers constitutes a barrier to trade?
We should be looking for ways to tax indirect costs incurred by wider society – like carbon emissions. This will ensure the full costs of the goods/service are accounted for in a supplier’s price.
In the example discussed a local tradesman would be in a better position to charge a lower price as suppliers further afield would have to build in the whole costs of travelling.
I’d favour all travel tax being levied on the fuel. Longer trips, thirsty cars and journeys at busy times (sitting in traffic uses more petrol) would all be discouraged.
In response to Ian’s challenge. Most of my work (at least 70%) is in London and I commute by train but I do travel in the UK and abroad. I always use the train if I can and if I have to fly I offset the carbon. I hardly ever drive. I don’t necessarily follow the money. I tend to select clients by their willingness to do something meaningful rather than the earning potential (although I charge market rates for my services). You may be interested to see my blog on a client in Scotland on these pages in this respect. My travel is actually offset through a new charity that I have helped them to create. In this way I believe I can maximise my potential to make a difference by working with forward thinking organisations. Of course I am lucky in that my services are in high demand and I can be quite selective. For those less fortunate; yes follow the money but consider how this can be done in a way that minimises the impact on the environment and the wellbeing of your people.
Ref local suppliers, my view is whilst cost of travel and impact is currently not material in deciding to work near home versus a few hundred miles away, it will be in future. Selecting local and getting the local suppliers into your way of thinking now could be a huge long term success.
Just a note on travel – we will never avoid the need to travel – even if us office types get to work from home, we will still need to satisfy the ingrained/genetic human need to ‘travel’ in our leisure time.
Having now worked in the railway industry, train is my preference too BUT I can’t always use the train. So let’s not make road users feel guilty, let’s help them use cars only when they need to…
Shaun, well done for using the train and offsetting flights – have a great Christmas and New Year, see you in 2011!”
Di
What about if the plaster from Powys is the best person available, and the local plasterers in Pangbourne all have issues with quality of their work? Having to re do the work will have environmental issues too!
These decisions are not simple. We can encourage the local supply chain, but ultimately the job needs doing, and it needs to be done right! In any procurement we can think about what is desired (value addded), value enabling, and waste. the client will pay for all three of these. The aim should be to maximise the value added, optimise the value enablers, and minimise any wastes.
very interesting topic – we should not underestimate the benefits of local procurement in terms of local respending (LM3). Ultimately it is down to clients to reward sustainable procurement by including it in the bidding process and holding suppliers to account. Buying local should make sense on every level.
Happy new year Shaun, yet again another great topic and sparking a few left of centre comments, I would truly like to read more on your Scottish travels and charity work. Hope we can chat again offline on how you offset your travel Downunder LOL?