[Interview]
Maintaining your responsible purchasing policy over the long term has undeniable advantages. But it is also a long journey. What are the most common obstacles? And how to overcome them? Yann Le Coz, specialist in responsible purchasing, answers ORSYS' questions.
Committing sustainably to a responsible purchasing approach: what are the benefits for the company?
Today, banks are particularly scrutinizing the sustainability of their corporate clients. They require proof of their CSR strategy (corporate social responsibility). This may include the EcoVadis rating, the LUCIE or B-Corp label for CSR or the RFAR Label (supplier relations and responsible purchasing) for a sustainable approach to responsible purchasing.
Holding the RFAR Label proves a real commitment to responsible purchasing but also to CSR. This is really differentiating, especially when the company responds to calls for tenders.
It can also be part of a broader strategy. In fact, obtaining the RFAR label also makes it possible to anticipate the raising of threshold requirements in the EcoVadis rating. In other words, it can enable companies to retain their bronze, silver, gold or platinum rating. EcoVadis evaluates more than 100,000 companies worldwide. It has also become a standard in calls for tender.
Where to start ?
It all starts with the signing of the "Supplier Relations and Responsible Purchasing" Charter. This is the first binding step in the implementation of a responsible purchasing approach.
Today, around 2,400 companies have signed the charter. However, only some 90 companies have been awarded the famous RFAR label. These include large groups, SMEs and public bodies.
By signing the RFAR charter, the company takes 10 commitments but also appoints an internal mediator as well as an SME correspondent, defines an action plan to progress in responsible purchasing, maps purchasing risks, respects legal deadlines for payment of suppliers, etc.
This also falls under 1er commitment provided for in the charter: “Ensure a responsible financial relationship with suppliers”. And rightly so! According to the Business Mediator, the primary cause of failure of SMEs in France is a lack of cash flow due to late payments from their customers. It is therefore the responsibility of a responsible buyer to pay particular attention to compliance with the payment deadlines of its suppliers.
How do companies plan for a responsible financial relationship with suppliers?
Concretely, the company must measure average payment times according to purchasing categories. For example, 30 net days for transportation or temporary work and 60 net days for supplies. In the event of overruns, an analysis of the causes of late payments will make it possible to put in place an action plan to guarantee, over time, that payment deadlines are met.
Let's quote it case of two large companies. One, in the banking and insurance sector. The other, in the energy sector.
The two purchasing directors leave from same observation. "I need all my suppliers, especially the smaller ones. But these suppliers are in a fragile situation (post-Covid). In particular, very small businesses are at greater risk of defaulting in the event of bad debts.
They continue their reasoning. “As a responsible buyer, I must support this economic fabric by paying my suppliers on time. Even, in these times of crisis, by paying in advance.”
On the one hand, we find the concept of “customer preferred by suppliers”. In times of shortage, the client thus seeks to ensure that it is better “served” by its grateful suppliers than its less good-paying competitors.
On the other hand, it is also pragmatism. Indeed, when there is a network to maintain (rail, electrical, hydraulic, etc.), a company must ensure that there will always be local economic players to provide services in each territory. But also, enough players to allow competition (see public procurement code).
What are the main difficulties when embarking on a responsible purchasing process?
First, companies must realize that embarking on this responsible purchasing approach requires a real commitment from their governance. And above all a long-term commitment.
Often, they don't know where to start. And they ask themselves: “What are we going to put in this purchasing policy? ". The challenge will be to adapt it to the vision and governance of the company (CSR strategy).
Businesses may also encounter obstacles. In particular, they will always need ensure that the strategic vision comes down to the field. Which involves good communication. And this, whatever the size of the company.
“Go get the label” is an ambitious approach. Support from a specialized company makes it possible to identify obstacles and provide solutions. It begins with a diagnosis of the company's current purchasing practices with regard to the label's requirements. You must first identify the gaps, then define an action plan to progress and, finally, reach maturity. That is to say, comply with the label's standards.
Some companies will encounter more specific difficulties. For example, for an SME, it will often be a question of better structuring its purchasing function. This is also the case for an SME that I supported.
Concretely, what are the obstacles encountered by this SME? What are the possible solutions?
The objective of this SME is to obtain the RFAR label, because the responsible purchasing approach is at the heart of its DNA. But is this vision of the company, or more precisely of its manager, well aligned with that of the different professions? This is the first point to make sure of.
Furthermore, the CSR approach is the responsibility of the quality department, as there is no dedicated department. Similarly, the company does not have a specifically identified purchasing department. The purchasing function is based on the business lines: project managers, production, etc. It is therefore necessary to structure the purchasing function in the company. The decision? To recruit a purchasing manager to drive the approach and guarantee its performance over time.
Once this has been done, and communication on CSR and responsible purchasing actions has filtered down to the field (production, the factory, etc.), other obstacles start to surface. For example, we hear: "I don't have anyone to do it" or "I don't have the skills". In this case, the solution lies in responsible purchasing training.
What are the main contributions of responsible purchasing training?
Participants discover that the responsible purchasing approach it is first and foremost a question of corporate governance. In fact, this is the first point addressed in training.
The trainer invites buyers to question themselves. Do they have the necessary and sufficient information on the their company's CSR policy ? If the answer is negative, the training helps them to become a force of proposal and to take ownership of the CSR issues of organizations. In other words, become aware of their company's commitments and work on their own role in implementing this policy. Including by reporting their questions, needs and constraints to the CSR department.
The ideal is toinvolve all stakeholders during responsible purchasing training. We can therefore imagine the CSR manager participating alongside the buyers. This makes it possible to express the issues and objectives to be achieved (better respond to customer calls for tenders by requesting the purchasing function) while all together considering possible courses of action/solutions.
Furthermore, during a inter-company training, buyers can discuss the problems they encounter with each other. They can benefit from peer feedback.
How much time and resources must be devoted to this process to be successful?
For an SME with 250 to 300 employees, you can count on about a year between signing the charter and obtaining the label. The internal project manager, often the purchasing manager, will devote one day per week to this.
What happens after obtaining the RFAR label?
The label is valid for 3 years.
Each year, the company receives a visit from an auditor who examines the progress compared to the previous year. So there is the initial audit, the follow-up audit and the renewal audit. We will particularly focus on the KPIs that the company has defined to measure the achievement of its objectives.
It must be remembered that this is a progress approach. The company needs 2 to 3 years to reach maturity.
Does this impact training needs?
Quite. Over time, the company more precisely identifies its areas of progress and more specific training needs. Thus, such a purchasing manager will want his buyers to become more robust in terms ofeco-design. Another will want his teams to progress on the TCO (total cost of a product or service). For still others, it will be necessary to improve their skills in the management of purchasing risks, and more precisely in the management of subcontracting, where many risks are concentrated.
What about large groups? How do they manage possible difficulties in implementing their responsible purchasing policy?
In large organisations, practices at central (head office) and decentralised (regional) levels are often disparate. Some purchases are negotiated at national level for the whole group. But for other purchases, this makes no sense. For example waste management is a local problem.
Nevertheless, head office buyers must be able to "talk" with local buyers. This means that the company's purchasing policy must be clearly understood and applied at local level (plant, etc.). It is up to the purchasing director to provide the impetus. For example, organising seminars that bring together the company's entire purchasing function. Alternatively, we can use "success stories" - sites that have successfully put the company's purchasing policy into practice - as a basis for communication.
We also find this problem and this type of solution in companies that grow through successive takeovers. Furthermore, companies which employ more than 500 people must publish their extra-financial performance declaration (DPEF) in addition to their balance sheet. Often, the company does not use the purchasing function enough to supply this DPEF. One way forward would be to involve purchasing departments in the drafting of this performance declaration. And therefore, to train buyers with a view to co-constructing a dashboard with performance indicators on responsible purchasing.
