How to change the negative impact on environment with modern sourcing decision models.

During my last holiday season I personally experienced how much we harm environment as people and how sad experience it could be. I decided to take time and go by car both ways  to the beautiful Mediterranean sea beach that I had visited as a youngster c.a. 20 years ago. I took my family and as we arrived everything looked perfect. Slightly more modern but the beauty of wild nature and sand beach remained! Simply no umbrellas and sun beds till the horizon an no restricted access to the private beaches anywhere. The beauty of national park at full glance.

The perfect impression lasted till third day when windy weather started and heavy sea brought to the beach the footprint of humanity. The sad view of sand covered with: plastic bags, plastic bottles, shoes, styrofoam packaging parts, nets, straws and many more. All the sudden the paradise turned into garbage dump. The Great Pacific garbage patch at my hand reach…

With strong ecological education at schools and rising peoples’ awareness of the impact that they make with each and every purchase, companies are adjusting their strategies. Not only because customers’ preferences change force them to do so, but to help safe the environment for the next generations. Purchasing and supply chain domains have a lot to do and can benefit a lot from people mindset changes:

  • attract talents with “can do attitude” who want to make an impact on the way we manufacture
  • implement sourcing selection criteria which include innovation on packaging, production process efficiency and promoting suppliers which are tracking carbon and environmental footprint
  • balance better global, local, glocal supply chains to cost and mitigate transport
  • apply some of slow life principles like better usage of returnable packaging and packaging recycling
  • embed in decision models lifetime value and lifetime cost of a product and link it to Sales and CSR activities of the company

Taking care, creating safe environment can become new key competitive differentiator, where people can see value and are willing to pay for it. Fight against climate changes and natural resources overconsumption should trigger the great come back of TCO/TCA principles to e-sourcing tools. 

As advanced algorithms are in our reach, TCO should not anymore be kind of mix of weighted score of certain criteria. We can design and implement decision models which combine quantitive and qualitative aspects into modern graphical and easy to follow screens. We can invite our internal and external business partners to review, discuss and adjust criteria to get the best output. As we can say that engine is the heart of a car or CPU is a brain of a computer, the advanced TCO algorithms are the core of Eveneum Strategic Sourcing Application [ESSA]. Easy to configure engine helps to take high quality, multilayer sourcing decisions, including but not limited to facts like:

  • Net Present Value and WACC
  • hard TCO quantitive factors like payment terms, delivery terms, currencies or material cost fluctuations
  • soft TCO qualitative factors like quality and delivery precision; warranty or contractual terms
  • technical aspects like O.E.E., serviceability, scalability, do-ability
  • social responsibility like carbon footprint

The above are just some examples. Decision model in ESSA is fully adjustable to your company specifics and can be granulated by category of products/services or by project. Please do not hesitate to contact us to get more insight on ESSA