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Green ( Purchasing? ) SRM….

Recently, a thought struck me on while most of the SRM projects are judged on the basis of ROI, process efficiencies achieved, transactional savings etc., can they also be judged on the basis of environmental impact pre and post implementation?

From green purchasing perspective, though CPO’s have been focusing on the type of raw material sourced, manufacturing technology etc. process related issue seems to have taken a back seat. Buyers are big contributors to CO2 footprint of the organization, thanks to their huge travel and communication needs and paper based buying processes. Organizations that have implemented technology solutions to achieve process KPI’s, have inadvertently been benefitted towards making the process green as well. Organizations have increasingly realized that during future business transformation initiatives, designing green processes can be a big support. Some of the following considerations will help the initiative further.

1. Focus on achieving paperless operations throughout P2P process lifecycle. This is indeed a key consideration and blocked mindset can be a big hindrance in achieving this. E.g in one of the SRM implementations in East Asian country, we were told that Government prescribes a paper based PO to have a valid legal contract. On persuasive follow up with legal cells, we were told that as long as there is an acknowledgement and acceptance of terms by the supplier, even an E purchase order is fine. Accordingly we blueprinted the process to enable the acknowledgement and acceptance of terms. Not only did it help to save process cost but also avoid huge paper wastage.

2. Collaboration is not merely strategic – Supplier collaboration is always seen as a strategic tool. While it definitely achieves strategic intent, it needs to be viewed from tactical glasses as well. Real collaboration on online transfer of various documents, E-bidding, remotely conducted reverse auctions etc. not only brings out efficiencies of operations but they also helps to improve green score by reducing papers in the system, avoiding interpersonal meetings and hence travel needs etc.

3. “Vendor Managed Inventory”, “Just in time” are established supply management concepts. SRM solutions improve information visibility in the system and hence help implementation of VMI or JIT avoiding unnecessary transit / system wastages.

4. Appropriately indexed, Document management systems not only capture the documentation during the entire procurement life cycle but also help to reduce the physical space and paper monitoring.

Looking at these process design aspects from green lenses do support strategic objectives and also helps the cleaner environment.

Comments invited….


Atul Chorbele

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