04 SCS:NEWS
IN BRIEF
PROCUREMENT
KPMG launches supplier
code of conduct
Accountancy firm, KPMG, has
launched a supplier code of
conduct, designed to ensure that
the suppliers it does business with
adhere to essential ethical and
environmental principles.
KPMG is writing this week to all of its
main contract suppliers asking them
to sign up to the code of conduct
which sets out ten core ethical
principles across the areas of business
conduct, labour conditions & human
rights, and the environment.
Mark Powderham, head of
procurement at KPMG, said: “KPMG
has made huge progress in recent
years with respect to embedding
Corporate Social Responsibility
(CSR) and diversity in all that we do
within the firm.
“Bought-in goods and services are
critical to the achievement of our CSR
and diversity objectives, and as such,
the next logical step is to integrate
our suppliers and contractors within
our approach.
“The Supplier Code of Conduct is a key
component of our sustainable
procurement programme.”
KPMG has 6,000 suppliers and spends
over 370m euros annually procuring
goods and services.
RISK
Going green is a supply
chain function
The “greening” of companies needs
to be taken out of the hands of
marketers and given to supply chain
managers that can influence the
procurement processes, according to
Aon Global Risk Consulting.
An Aon report reveals that 76 per
cent of respondents said they only
had limited visibility of their
suppliers’ supply chains leaving them
open to reputational risks should
their supplier be found to be less
than green.
Alex Hindson, head of enterprise risk
management at Aon, set out a five
point plan to manage this risk:
1. Embed environmental thinking in
76% of companies are open
to reputational risk
procurement processes and function:
take greening initiatives out of the
realm of pure marketing and PR, and
integrate a green way of thinking
throughout the business.
2. Measure what you are doing: if the
supply chain is going to be truly
green it is essential to understand
the environmental impact and
carbon footprint of what you buy.
3. Set objectives: decide from the
outset what is important and set
some change management
objectives for improvement.
Be realistic with the goals you set.
There is no point saying you want
your company to be completely
carbon neutral in the first year of
the project if you know this is
unachievable.
4. Measure and track the total cost
not just financial cost: examine
where waste is occurring in the
supply chain and where this can be
cut down.
A major cost to companies is the
waste of raw materials.
5. Engage suppliers: educate
suppliers in objectives around
sustainable development then
evaluate their performance and
embed this in selection and
performance management processes
for suppliers.
CONFERENCE
International focus
for German congress
Creating value and connecting
cultures is the theme for the 25th
German Logistics Congress, which is
due to take place from 22nd to 24th
October in Berlin.
The German Logistics Association,
BVL, which organises the event, says
that the focus is on the BRIC states
(Brazil, Russia, India, China) as guest
countries. In addition to the BRIC
states, the so-called “Next 11” will be
lookedat,itsays.
Speakers and moderators from 15
nations will talk about specialist
and managerial topics in the
logistics sector.
Registration for the congress is
possible via the web site
www.bvl.de/glc
NEWS ANALYSIS: NICK ALLEN
RESOURCES
Taking a
full measure
SEPTEMBER 2008 SUPPLY CHAIN STANDARD
www.supplychainstandard.com
Oil prices may well be showing signs of weakness, falling from record highs of just
short of $150 a barrel in July, but this is not a sign that the cloud is passing and
that nothing need be done to curb consumption, the long-term costs of diesel
and indeed, all major energy sources are expected to remain high. This can only
mean one thing; companies are going to have to think very hard about how they
use these expensive resources.
Of course, there are obvious areas for attention such as reducing transport
wastage – reducing empty running, maximising the cube, cutting out
unnecessary legs, better driver training – but there is a need to address
fundamental strategic issues as well, if energy prices are to remain high.
Port-centric logistics is being considered and put into practice by a number of
leading retailers, such as Tesco, Sainsbury’s and Asda, as a way of cutting out the
unnecessary transport of containers across the country from ports to distribution
centres located in the UK midlands. With such a high proportion of goods now
being imported into Europe from the Far East, it can make perfect sense to
undertake operations normally undertaken at DCs at the port of entry.
Perhaps it’s time to reconsider the economics of holding stock centrally. When
transport was relatively cheap, holding stock at a central point and replenishing
forward locations or retail outlets with great frequency could be seen as a sound
model. With fuel costs playing a more significant role, it may make more economic
sense to hold stock closer to the market and cut down on transport. This could
increase inventory, but on balance the equation may well prove positive.
For manufacturers energy usage is a highly pertinent issue. With gas prices
linked closely to that of oil, cutting out energy wastage in fabrication processes is
coming under close scrutiny. A report just published by analysts, Aberdeen Group,
on asset management, highlights some of the key focal points for best-in-class
manufacturers. Leaders are undertaking initiatives to increase visibility into
production and asset performance by seeking to use technology that shares
information across the enterprise and that gives employees greater visibility into
the manufacturing process. According to the report these companies are also
integrating energy management programmes with their asset management
strategies. Fundamentally, this is the same with all business processes; if you don’t
measure and monitor them then you have little control over the outcome. With
energy prices as high as they are, measuring and monitoring is clearly going to
have a greater significance in our business lives.
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