Cost Reduction
The two main categories of cost reduction from a sustainable procurement process are reduced internal costs and reduced environmental / compliance costs.
An example of reduced internal costs is where an organisation invests in more efficient machinery/products thereby reducing costs such as energy, lower maintenance e.g. purchase of energy efficient lighting or fuel efficient vehicles. These have clear and measurable benefits to the financial bottom line. Yet certain machinery can as well reduce the burdensome costs related to managing environmental compliance e.g. installing an air filter to capture particles can enable a business to meet their environmental obligations and as well record and report on the results.
Another initiative is the reduction of overall packaging. Working with supply chain members to reduce their packaging and working with the product design team to reduce packaging on products produced will reduce operational costs, waste management costs and managing the environmental impact from unnecessary waste.
But what about the indirect benefits from taking these initiatives? Active communication with your employees on organisational initiatives and benefits achieved can have a roll on effect by encouraging them in behaviour change and adopt easy wins such as reducing paper, cutting down unnecessary business travel, managing the temperature of air conditioners etc. These may be small but overall they add up and can have a positive influence in reducing operational costs.