Overview:

• A new long term strategy has been formulated to focus the company’s strategy on using sustainability as a vital source of global competitiveness.

•  A new sustainability training program was delivered to over 200 procurement staff. Early evaluations have shown change management is being successfully implemented.

Challenge:

In February 2016 a multi-national Brazilian conglomerate with core competencies in agrochemicals, biological and biotechnology engaged Challenge Advisory to assess the sustainability of current supply chain and procurement practices.

In recent years, government policy has forced the industry to take a proactive approach to sustainability or face consequences. In 2015, the client procured goods from over 21,000 suppliers in 86 different countries for approximately $5.4 billion.  47 % of the entire procurement spend came from 2 EU countries, Brazil and Canada. Procurement from Russia and China accounted for 18 % of the firm’s total spend. With significant procurement volumes from different suppliers, the client had to ensure goods were manufactured in accordance with the new ethical, environmental and social standards introduced following a federal investigation.

• Identify how sustainability can be a source of competitive advantage.
  
• Evaluate brand positioning in sustainability for emerging market segments.
  
• Streamline procurement processes and implement tools to assess whether its suppliers were meeting the company’s new ethical, environmental and social standards.
•  Implement procedural changes across supply chains.

Strategy:

• Sustainability as a Source of Competitive Advantage:  

1. Identify emerging ‘sustainability priority’ segments and build a brand positioning strategy.
2. Build new partnerships and consolidate partnerships with sustainability NGO’s and bodies.
3. Identify and build an implementation plan for cost-saving sustainability technologies.
4. Consolidate understanding of global regulatory expectations for sustainability. 

• Implement a new category and sourcing strategy. 
• Pilot a new blockchain based collaboration platform to assess future sustainability performance of suppliers. 
• Conduct a change management exercise to build a new sustainability training programs for procurement employees. Build an implementation plan.

Impact:

• The blockchain pilot has been rolled out across 28% of ‘priority procurement’ suppliers leading to increase in supplier engagement on sustainability and real time analysis of sustainability practices. The client expect 98% roll out by the end of 2019. 
• A new long term strategy has been formulated to focus the company’s strategy on using sustainability as a vital source of global competitiveness.
• A new sustainability training program was delivered to over 200 procurement staff. Early evaluations have shown change management is being successfully implemented.
• The client is now running a proof of concept innovation portfolio with 22 different startups to test sustainability technology across various use cases. Its open innovation program built in partnership with Challenge Advisory.