With control over indirect procurement spend, companies can meet sustainability goals, including working with like-minded suppliers & reducing road miles
Having accurate information on what is spent and with which suppliers is vital for procurement professionals, even if obtaining this can be tricky, especially for indirect spend categories.
Such knowledge means procurement professionals can see just what they are spending, when and with who and can then make informed decisions about which categories could be purchased more efficiently. This might mean using different suppliers, consolidating spend with fewer organisations or even identifying spend that could be eliminated altogether.
But that’s not the only advantage of having greater control over spend. As organisations seek to reduce their carbon footprints and operate in a more sustainable and responsible manner, purchasing professionals can do their bit to help by ensuring they take proactive decisions about what they purchase and where items come from.
The challenge of indirect spend
Indirect, or non-core, spend is a good example of this. In many organisations, this is often overlooked by procurement teams who have other categories they need to focus on.
That means items such as office furniture, stationery and even IT are purchased as and when needed, often by the end-user or an office manager. Typically, the aim is to get the item as soon as possible, with little regard for either the price or where it comes from.
Channelling spend through a digital solutions means organisations can easily identify what they are spending.
Armed with this knowledge, organisations can put in place parameters around such activities and choose what matters to them. Internal users, meanwhile, can purchase items from pre-agreed suppliers, up to agreed spend limits.
Sustainability certifications and local sourcing
Amazon Business allows organisations to procure from suppliers that possess sustainability certifications, including trusted third-party labels and Amazon’s own Compact by Design Certified.
Such items are labelled Climate Pledge Friendly and provide reassurance that the suppliers have met certain standards when it comes to sustainability.
Through its Guided Buying feature, Amazon Business allows organisations to mandate the use of local suppliers.
Not only does this help to direct spend towards local enterprises, including small businesses, it also means lower carbon emissions as a result of road miles associated with delivery.
Reducing emissions through consolidated deliveries
Deliveries can also be consolidated on a particular day each week, helping to cut the number of journeys and further reduce mileage. Progress towards the use of local suppliers as a proportion of spend through Amazon Business can be tracked, and improvements over time recorded, so procurement teams can demonstrate the impact they are having towards broader initiatives.
Further efficiencies can be gained by eliminating unnecessary purchases altogether. Having a better understanding of spend through reporting tools such as Spend Visibility and Amazon Business Analytics means procurement teams can identify wasteful purchasing, such as items being over-ordered or stock not being used.
Cutting out such transactions will not only save money but will also avoid the carbon footprint associated with the manufacture and delivery of those items.
The benefits of Amazon Business: Durham County Council
Durham County Council is already seeing the benefits of turning to Amazon Business to help bring its procurement into line with wider organisational goals in social value. After launching its “County Durham Pound” initiative in 2022, which aimed to link procurement decisions with environmental, social and governance (ESG) targets, the council partnered with Amazon Business to manage off-tender spend such as IT equipment, medical supplies and library books.
By channelling spend towards local rather than national or even international suppliers, the council ensured carbon emissions were reduced by cutting transport distances, while helping to boost local businesses and ensure money stayed within the local community.
Durham County Council now believes it has a procurement set-up that not only delivers cost efficiency and value for money but also contributes to ESG goals and benefits the local community.
Procurement Magazine
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