What purchasing strategy for 2024 and beyond? CSR is becoming increasingly important within organisations. Every segment of the company is called upon to take it into account in its activities. This also applies to the purchasing function. Christèle Gravoille, an expert in purchasing strategy and change management, takes stock of the latest trends. Here's an overview.
Purchasing strategy: when CSR changes priorities
The search for savings is a major strategic focus for purchasing departments in 2024. Why is this?
Rising material and logistics costs, supply difficulties. Against this backdrop, price rises imposed by suppliers have had a major impact on organisations. These price rises were justified in the post-Covid period. But this is no longer the case. For some, this is an opportunity to apply unjustified price increases.
According to a study by the consultancy AgileBuyer and the French National Purchasing Council, carried out at the end of 2023 among 870 specialists in the function, 77 % of purchasing departments surveyed have set cost reduction as a priority objective for 2024. This rate has been rising since 2022 (55 % in 2022 and 66 % in 2023), returning to the same level as in 2021.
This was a major priority in the post-Covid period: the securing supplies. For 2024, this is no longer a major strategic focus: the risk of a shortage seems to have been averted for the time being. This has a major impact on relocating purchases and buying made in France products. These practices are not conducive to reducing purchasing costs.
Note, however:
1/ The geopolitical context remains highly unstable. These issues can therefore once again become a major concern at all times.
2/ They could also return to the forefront to meet the challenges of decarbonation.
The continuation of the development of decarbonation is another major aspect of our purchasing strategy. This means controlling the entire upstream supply chain, as well as the downstream logistics chain. 41 % of purchasing departments surveyed now measure the carbon footprint of their suppliersemissions, compared with 23 % in 2022. And the C0² criterion is taken into account by 49 % of purchasing departments when selecting their suppliers.
The impact of CSRD on purchasing strategy
But this progress could prove insufficient with theentry into force of the CSRD (Corporate Sustainability Reporting Directive)the 1er January 2024. This European directive aims to encourage the sustainable development of companies. To this end, it reinforces the obligations and standards for publishing data on corporate sustainability.
Two main themes:
- harmonising non-financial reporting
- improve the availability and quality of ESG (environmental, social and governance) data reported
The aim? Strengthening investor confidenceThe ESG information provided by companies is also of interest to stakeholders and the public.
The CRSD covers :
- companies with more than 500 employees
- with sales in excess of €40 million
- or have a balance sheet total of more than €20 million.
During a conference organised in February 2024 by the Caisse d'Épargne Île-de-FranceChristelle Meunier, Sustainable Development Project Manager at BPCE, explained the challenges of these new regulations.
So one of the major challenges could be theaccess to finance. Banking institutions and investors should pay particular attention to the following factors corporate sustainability trajectories.
CSRD can therefore represent a tremendous business opportunity for companies of all sizes, which :
1/ are going to take up the subject without delay
2/ will be able to develop a competitive advantage from this regulatory constraint
Then, the CSRD will gradually expand by 2026 to smaller companies. In turn, this will have an impact on the entire value chain: suppliers and subcontractors of all sizes.
For example :
If a client decides to include 50 % of recycled material in its packaging to meet the challenges of sustainability, the whole supply chain will have to adapt.
5 lines of action to reconcile cost reduction and CSR in your purchasing strategy
Against this backdrop, purchasing departments are faced with the following equation: how can they reconcile cost reduction with the integration of CSR issues?
Commercial negotiation alone will not be enough. But purchasing departments can act in several directions.
1/ Play the sobriety card
Purchasing departments are going to have to play the sobriety card. This means in particular : eliminate waste at all levels of the purchasing process.
2/ Think in terms of "global cost" and "life cycle".
Thinking in terms of "global cost" and "life cycle" will become more important than ever. It takes into account the challenges of recycling, reuse, decarbonisation, etc.
Mature organisations that have already developed this purchasing practice will continue to do so. On the other hand, in some VSEs/SMEs, the purchasing culture is very much focused on operational activities and negotiating the face price. For these organisations, a change of culture and strategy is required.
3/ Collaborate more to innovate
At the same time, the search for innovation requiresinvolve buyers and suppliers from the outset in defining requirements.
Additional actions: monitoring, benchmarking and sourcing.
The development of a more collaborative approach internally and externally also encourages suppliers and subcontractors to adopt more virtuous CSR practices, with the mutual aim of reducing overall costs.
4/ Communicating with suppliers
Purchasing departments play an essential role in supplier relationship management. It is therefore up to them to ensure that suppliers are :
- capable of meeting the challenges of innovation and traceability
- inclined to provide the information needed to draw up the client's extra-financial report
Good communication means teaching.
The example of SPIE France, a digital services company:
SPIE France carried out a awareness-raising video to explain to its stakeholders, in particular its suppliers and subcontractors, what CSRD is and how the company is working on this issue.
5/ Training buyers
Communication and education are also beneficial internally. However, the training of purchasing teams is just as essential in reconciling cost reduction and CSR issues. This can start with basic training such as Responsible purchasing: reconciling purchasing performance and CSR issues. Then, as buyers become more skilled in this area, training needs can become more specific.
Sobriety, overall cost and life cycle, innovation and communication, training for buyers... These are the key areas to bear in mind when reconciling cost reduction and CSR in a purchasing strategy. Where do you start?
