Procurement is becoming a strategic part of the supply chain process over the past few years. Executives have realized how valuable it is to the company as a whole. The main component of strategic sourcing is that the methods by which companies obtain goods and services need to be just as carefully planned for operational excellence as any other aspect of the business. Recently, a project undertaken by a group of Smeal MBA students provides a clear example of how reevaluating procurement can provide a key starting point for boosting the effectiveness of an organization, increasing its profit margins and keeping costs down.
In an effort to take control over sustainability and social innovation in the Smeal College of Business, Professor Terry Harrison and students began working with the institution’s procurement services departments to get hands-on experience in implementing sustainable, cost- effective sourcing practices while also promoting green logistics within the university.
The procurement department had never before undertaken the effort to evaluate suppliers based on a clearly defined list of sustainability criteria, Harrison noted. The students chose new vendors and fostered these relationships. Since then, other procurement areas within the university have moved toward sustainability.
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