Friday, 25 January 2013

Cold comfort for suppliers & households

What do you mean by sustainable or responsible procurement? Is it something like this:
"... need to manage any related risks to our reputation and continuity of supply. We also have an opportunity to influence suppliers and encourage them to adopt responsible business practices through our purchasing power."
We've discussed sustainable procurement before and some of the apparent 'do as I say, not what I do' anomalies'.

Today we've learnt that British Gas has turned off the demand tap prematurely of its home insulation scheme. Suppliers are left with commitments to households they can't honour under the scheme, potential job loses, and worries as to whether they will get paid. With snow still on the ground, families worried about heating bills and the latest GDP this news couldn't have come at a worse time. There are now some longer term reputation procurement risks which BG will have to manage:

  • Perception that BG have traded off 'reducing customers costs' for a short term gain and longer term increased revenue; 
  • Degeneration into an adversarial supply market relationship with the associated legal costs;
  • Breakdown of supplier trust;
  • Perception that cost outweighing environmental impact;
  • How embedded is ownership of commitment to responsible procurement.

While suppliers will suffer, the relationship with Whitehall is unlikely to be strengthened either nor the ability to be a credible voice.

I just wonder what the procurement risk register said in terms of probability, impact, proximity and mitigation?

No comments:

Post a Comment