Efficient & Comprehensive Supply Chain Sustainability Analytics.
Why Supply Chain Sustainability?
An organization’s various sustainability impacts arise not only from its direct interactions with its immediately surrounding environment and communities, but also (and often to a far larger extent) from its purchasing activities, and the corresponding (often global) supply chains. The same is true of an organization’s natural capital dependencies.
These impacts and dependencies together often represent both present and latent commercial and reputational risks and opportunities for an organization. Today’s competitive market, a tightening regulatory environment, fluctuating energy costs, issues of supply chain resiliency and efficiencies, and other competitive pressures are shaping supply chain sustainability management as a strategic imperative.
Why Sustainable Spend Analysis?
Sustainable Spend Analysis is widely recognized as the most efficient and effective way to achieve a comprehensive, multi-impact analysis of the whole supply chain. Results readily provide quantified 'hotspot' analysis, informing the impact types, procurement type, and supplier(s) that warrant further investigation and/or engagement.
Sustainable Spend Analysis utilizes only an organization’s general ledger, a reliable and complete source of information, and maps it to the Comprehensive Environmental Data Archive (CEDA®) (see: Data:CEDA) via VitalMetrics’ proprietary software. This dramatically reduces the time and resources usually required to complete a supply-chain sustainability impact assessment, while simultaneously improving the completeness and accuracy of the results.
For example, a completed sustainable Spend Analysis might deliver results such as the:
- GHG Emissions
- Water Consumption
- Primary Energy Use
- Waste Generated
...of an organization's entire supply chain - 'cradle-to-gate' - and segment that analysis back to the organization by:
- Procurement Type / Product Category
- Business unit
The Sustainable Purchasing Leadership Council’s (SPLC) Guidance for Leadership in Sustainable Purchasing Version 1.0 strongly encourages organizations to conduct a sustainable Spend Analysis as a way to understand and prioritize opportunities to improve environmental, social, and economic performance within their supply chains.
U.S. General Services Administration (GSA) commissioned VitalMetrics to conduct a comprehensive environmental spend analysis for 12 environmental impacts across federal spending, and to identify opportunities to improve procurement procedure to reduce its environmental impacts. With over $500 billion annual expenditure, the U.S. federal government is ranked as the single largest purchasing entity in the world. The analysis was underpinned by CEDA, an environmentally extended input-output LCA database, and included a structural path analysis (SPA).
The procurement ledger included over 3.3 million individual rows of data and over 800 million data fields. The spend data was collated and stored into a queryable database, and a software platform was developed by VitalMetrics to analyze queried spend data by purchasing agency and procurement categories.
The project confirmed that it is essential to for large organizations to prioritize major spending categories in order to identify actionable strategies to mitigate their impacts.
Travis Perkins Plc has supplied the UK and Ireland building and construction trades for more than 200 years. It is a FTSE100 company with 18 industry-leading brands, 1,900 outlets, more than 24,000 employees, and with over 2,000 suppliers feeding the businesses.
VitalMetrics was commissioned to organize and ‘clean’ disparate data received from Travis Perkins Plc and to deliver supply chain analysis by business divisions, suppliers, and product categories. The study calculated water use, energy consumption and waste production, as well as GHG emissions throughout the supply chain. Travis Perkins Plc was surprised to learn that although the business procures thousands of goods and services from over 2,000 suppliers, a small number of product categories contribute to a high proportion of the supply chain’s environmental impacts.
Travis Perkins Plc now has a sustainable purchasing program in place.