6.4 Resources

How do you secure the organisational resources required for sustainable sourcing?

Implementing a sustainable sourcing strategy requires allocation of sufficient human and financial
resources. The company’s decision to implement sustainable sourcing is based on the expectation that it is possible to create the business case for it and roll it out successfully. Allocation of resources is motivated by the expected benefits of sustainable sourcing (see Chapter 1).

It is important to clearly distinguish between investment costs in the start-up phase and longer-term operational costs. Some of the resources are needed for developing sustainable sourcing in the start-up phase, which can be seen as temporary investment costs. Once sustainable sourcing has become part of normal organisational structures and processes, operational costs can generally be limited.

You may want to ask yourself the following questions, related to both expected benefits and costs.

Expected Benefits from Sustainable Sourcing

  1. How will your company’s brands and reputation benefit and even profit from sustainable sourcing?
  2. What benefits can be expected from improved supply security and/or from assuring better qualities supplied?
  3. What cost reductions (at the farm, in the supply chain) can be realised by improving supply chain management for sustainable sourcing?
  4. What additional benefits can be expected?

Resources During the Start-Up Phase (rolling out sustainable sourcing)

  1. What is your time schedule to roll-out sustainable sourcing (for selected raw materials)?
  2. What main activities call for allocation of (additional) resources in this phase? For example:

a. organising internal processes/structures for sustainable sourcing;
b. assisting suppliers and/or farmers to switch to sustainable agriculture;
c. cooperating with third parties (eg agricultural specialists, certification organisations);
d. implementing certification systems;
e. developing marketing and communication materials e.g. Supplier Terms of Trade, Code of Conduct, Supplier Guidance Packs etc.;
f. developing training and engagement activities;
g. setting up helpdesks for questions;
h. setting up and running the first stakeholder dialogue workshops with farmers, other managers etc.

  1. What are the human resources needed in this phase? Which resources are already available and which ones have to be developed through training, hiring staff or getting external help?
  2. What financial resources are needed in this phase?

Resources in the Operational Phase (after rolling out sustainable sourcing)

  1. What are the main activities that, also after the roll-out phase, will call for (additional) resources? For example:

a. Auditing and certification costs;
b. Price premiums for certified raw materials;
c. Continued assistance of farmers;
d. Implementation of training and engagement programmes;
e. Systems to monitor and manage process, to follow up issues that arise and give visibility to your supply chain.

  1. What does this mean in terms of both human and financial resources in the longer-term?
  2. How can these resources be justified in terms of the expected benefits (see above)?

Convincing Top Management

In some companies, there may be fears about the human and financial resources needed for implementing sustainable sourcing. Experiences in a number of firms show that in reality much can be achieved without asking for substantial additional resources. Although a detailed business case is often difficult to present, the following can be useful to convince top management:

1- Clearly distinguish between one-time start-up costs (investments) and longer-term operational costs. Show how implementing sustainable sourcing can be combined with improving quality and logistics, increasing supply security and, in many cases, reducing overall costs. To help you with this task, a potential cost curve has been sketched in Diagram 12. You may specify this curve more succinctly for your own company.

2- Point to the success of other companies, who have achieved sustainable sourcing without spending unreasonable amounts of money. Cite specific examples.

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