Written by Victor Chartier
After years in procurement within the automotive and logistics industries, transitioning to the agri-food sector unveiled new challenges and opportunities. Initially guided by LCA to assess environmental impacts, it soon became clear that meaningful progress required supplier engagement to embed sustainability across the supply chain.
This article shares lessons learned and best practices for aligning sourcing strategies with sustainability goals, balancing pragmatic implementation with the flexibility to drive future innovation.
"Partnering with BrightWolves helped embed sustainability into our procurement processes, providing a solid framework that will guide and evolve with future sourcing cycles."
Giovanni Valentini, Regional Sourcing Manager, Kemin
What is Supplier Engagement and Why it Matters
Supplier engagement extends beyond transactions; it is about fostering collaboration to achieve shared goals in sustainability, innovation, and quality improvement. In the context of sustainability, engaging suppliers means working together to reduce environmental and social impacts while enhancing resilience and scalability across the supply chain.
Supply chains are inherently complex, involving diverse stakeholders at varying levels of sustainability maturity. Effective engagement not only reduces these impacts but also builds long-term partnerships capable of withstanding disruptions and evolving priorities.
Laying the Groundwork: a Strategic Approach to Engagement
A strategic supplier engagement framework aligns interactions with specific business objectives and optimizes resource use. Two primary engagement types have emerged:
Data Collection Engagements: Focused on improving sustainability reporting and strategic planning.
Transformative Engagements: Designed for mutual benefits, often requiring investments from both parties to achieve measurable sustainability outcomes.
Strategic engagement begins with a deep understanding of the supply chain— leveraging existing insights or gathering data systematically—and evolves into a structured plan that integrates sustainability objectives with business priorities.
Prioritizing Commodities and Suppliers: a Strategic Lens
The first step in scaling supplier engagement is determining where to focus efforts. Prioritizing commodities requires assessing their significance based on key factors such as:
Environmental Impact: Identifying commodities with high contributions to greenhouse gas emissions, water use, or biodiversity loss.
Procurement Spend: Targeting high-spend areas where procurement has greater leverage.
Strategic Importance: Focusing on commodities critical to core product lines and corporate reputation.
By narrowing the focus to these priorities, companies can allocate resources effectively to drive the most meaningful impact.
Categorizing Suppliers: Mapping Influence and Capabilities
Once priorities are set, suppliers must be categorized based on their role and readiness to support sustainability goals. Key criteria for categorization include:
Business Criticality: Evaluating the supplier’s impact in terms of spend, volume, and environmental footprint.
Sustainability Preparedness: Assessing the supplier’s capability to meet sustainability and compliance expectations.
Negotiation Leverage: Understanding the level of influence the company holds over the supplier.
External Risks: Considering geopolitical or operational risks that might impact supply continuity.
This categorization provides a clear understanding of the supply chain, enabling tailored engagement strategies.
Tailoring Sourcing Strategies to Supplier Maturity
With suppliers categorized, sourcing strategies can be fine-tuned to align with their sustainability maturity. Four key approaches include:
Expand: Scaling relationships with mature suppliers offering growth potential.
Collaborate: Building deep partnerships with mature, business-critical suppliers.
Develop or Exit: Supporting critical suppliers needing development or considering alternatives if alignment isn't possible.
Deprioritize: Reducing focus on suppliers that are neither critical nor sustainability-ready.
Balancing these strategies ensures resources are directed where they will have the most significant impact.
Framework output example Establishing Recurrence and Building Trust
Supplier engagement can be complex at first, but starting small and iterating helps build a scalable foundation. Embedding engagement processes into procurement cycles minimizes disruptions and fosters internal and external acceptance.
Transparency and collaboration are critical: listening to supplier concerns and aligning incentives create mutual benefits. For less mature suppliers, offering shared-value initiatives such as market access or long-term contracts can be particularly effective.
A balance between leverage and collaboration is crucial to making meaningful progress without jeopardizing relationships.
Key Takeaways for Effective Supplier Engagement
Reflecting on this journey, several key principles emerge:
Start with Data: Even limited data provides a foundation for prioritization and action.
Segment and Focus: Tailored strategies ensure efficient use of resources.
Align Incentives: Demonstrating the business case for sustainability drives supplier buy-in.
Build Relationships: Trust and open communication are essential for long-term success.
Make Tough Decisions: In some cases, exiting non-aligned relationships is necessary to achieve sustainability goals.
Scaling supplier engagement is both challenging and rewarding. By focusing on key commodities, categorizing suppliers, and aligning sourcing strategies, fragmented supply chains can be transformed into collaborative networks striving for shared sustainability objectives.
Let’s Start the Conversation!
Embarking on a supplier engagement journey can be complex—whether you are just starting out, facing challenges, or unsure of the next steps. But you do not have to navigate it alone.
Experience shows that even small, strategic actions can lead to significant progress. If you are looking to prioritize your efforts, categorize your suppliers effectively, or align your sourcing strategy with sustainability goals, reach out!
We can discuss how to take the first steps toward a more sustainable and resilient supply chain.
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