The 8 Modules, 31 Focus Points and 5 Collaboration Phases of the SEIC Methodology provide a path to success

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Our Diagnostic Tool provides a gap analysis of SEI capability to support the strategic planning process

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In-depth explorations of the approaches and techniques used by leading organizations in the field of SEI today

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Thought leadership and insightful articles on the most important issues for companies pursuing an SEI agenda

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Insight calls are available to join for all members of the SEIC and will be addressing a number of topics

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Useful downloads, from unique research to practical templates, frameworks and tools being used by SEI leaders

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The 11 modules of the SEI methodology focus on the key processes that enable the successful rollout of SEI

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Our Capabilities Assessment tools provide the means for organizations to gain insight into their own SEI approach

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In-depth explorations of the approaches and techniques used by leading organizations in the field of SEI today

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Thought leadership and insightful articles on the most important issues for companies pursuing an SEI agenda

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Useful downloads, from unique research to practical templates, frameworks and tools being used by SEI leaders

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Linking SEI and sustainability

While innovation and sustainability may seem to be at odds with one another, the two are often complimentary. Understanding this is one of the keys to realizing SEI’s full potential

SEI and sustainability

Pursuing sustainability in procurement has often been a difficult sell. At odds with traditional deliverables such as cost reduction, bottom-line protection and on-time delivery, the added expenditure associated with sustainability initiatives can prevent projects from getting started, or bring them to a close before they deliver results.

However, recent years have shown that sustainability in the upstream supply chain can have a significant impact through brand protection, consumer demand, regulatory incentives and potential cost savings.

This was highlighted earlier this month when, at a Prince of Wales’ International Sustainability Unit (ISU) event, 12 multinational companies pledged commitment to ending forest degradation in supply chains and enhancing sustainability. Among their number were some of the largest players in the confectionery industry, including Mars, Hershey, Mondelez and Ferrero.

Equally, some of our SEIC members are pursuing strategic sustainability targets, with the likes of Bayer and Merck playing a prominent role in the initiative Together for Sustainability – a collaborative project spearheaded and sponsored by the chief procurement officers of leading players in the chemicals industry.

But a key question here, and one that has cropped up on more than one occasion during my time at the SEIC, is whether sustainability can, or should, be a goal of SEI programs.

Companies pursue SEI for a number of reasons, and improving long-term supply chain sustainability is one of those. Indeed, while innovation and sustainability may sometimes seem to be at odds with one another, the two are very often complimentary.

A 2012 study from MIT found that “business-model innovation is the crux of sustainability profits”, with companies leveraging innovation to find sustainable opportunities. Research carried out by the Harvard Business Review, meanwhile, shows that sustainability contains technological and organizational innovations that “yield both bottom-line and top-line returns.”

The reality is that many of the outcomes that SEI projects target can also have a positive impact on sustainability.

Take energy-efficient manufacturing as an example. In 2013, the International Energy Agency (IEA) found that outdated manufacturing practices resulted in an estimated $80bn worth of electricity being wasted, which had a direct impact on the cost of production and, by extension, costs charged in the downstream supply chain.

There’s also the increasingly stronger link between sustainability and buying organizations’ core business. Consumers are ever-more conscious of how their products are produced, with Nielson’s 2015 Global Corporate Sustainability Report finding that sales of goods from brands with a demonstrated commitment to sustainability grew by more than 4% globally, compared to a 1% growth for those that don’t.

Developing solutions for these issues has myriad benefits – improving profit margins, enhancing product appeal, and driving sustainability – but the key here is that the biggest impact will be felt when buying organizations and suppliers collaborate intimately while working towards long-term goals.

These advantages have been identified as ingredients of successful SEI by our members. Indeed, Johnson & Johnson embeds sustainability into the Joint Strategic Planning (JSP) governance process of its SEI agreements – a strategic element of its SEI process. While not the sole goal of the relationship, sustainability is one of several deliverables that must be addressed if the nascent opportunities that exist in the supply base are to be fully optimized.

Expectations for an SEI program can and should extend beyond pure financial profit. Understanding this and structuring an SEI strategy accordingly is one of the keys to realizing its full potential and unlocking a host of long-term, sustainable benefits across the supply chain.

Samuel Wrest

To find out more about the Supplier-Enabled Innovation Center and the SEIC community, go to www.sei.center or email hello@sei.center.

 

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