Procurement can be defined as the acquisition of goods or services from an external source. When you buy your weekly groceries you are procuring food from the supermarket.
In order to stock the shelves the supermarket has procured the food from the farmer, fisherman or food processor. In terms of your FM role you will procure both goods and services to enable your department to function properly.
As well as the obvious concerns of price, quality, service etc. there are two other areas you should consider when buying goods and services.
In today’s economic climate all organisations, no matter what type or which sector they are in, the public, private or not-for-profit sector need to procure goods and services which represent good value for money, however, cost should not be the only criterion on which a decision to purchase is made, particularly if our organisation is to meet its CSR and sustainability commitments.
A classic example of procurement that was not ethical was exposed in 2008 when the BBC’s Panorama team exposed the Primark chain store reporting that child labour was used extensively by one of the major suppliers used by Primark.
More recently, the companies that produce iPhones on behalf of Apple have been shown to impose poor working conditions on their staff, leading to plenty of negative publicity for the technology giant.
So, how does this relate to Facilities Management? Our FM department is not likely to be buying clothes at Primark, but there are other, more relevant examples. Do we know where the paper for our stationary products is sourced from? Do our cleaning contractors pay the living wage and treat their staff fairly?
The problem is, how do we know where the supply chain starts? The answer is that in many cases we do not and so how can we ensure that our procurement practices are as ethical as possible?
The answer is to have a very clear Procurement policy. The policy will demand that procurement of goods and services is only permitted from suppliers who themselves have very clear ethical procurement policies.
Whilst we can never be 100% certain, the further back in the supply chain we go in terms of demanding ethical procurement the more certain we can be.
This goes hand in hand with ethical procurement. Sustainable procurement looks specifically at procuring goods and services which protect the environment and consider the associated social implications.
Reducing and reusing are the most effective routes to sustainability and also, of course, cost reduction and we should always try to identify opportunities to eliminate or reduce the needs for purchases wherever possible.
In ensuring that unnecessary or unjustified purchases are not actioned we are not only saving on direct costs but we are also reducing the environmental impact of supplies.
However, we must also be realistic – there is always going to be a requirement to purchase some goods and services and so we should look for opportunities wherever possible to make this as sustainable as possible.
There are two main ways we can ensure this:
- Having an approved supplier/product list – ensuring only the best value for money and the most sustainable products are used.
- Requiring a mandatory business case for non-approved items – this ensures that there is a real business need for any itne or service procured.
To ensure sustainable procurement each procurement activity should be assessed against nine sustainability objectives. These are:
- Protecting human health
- Promoting fair working conditions
- Promoting social enterprise and improving local skills
- Promoting local employment and economy
- Reducing soil, water and air pollution
- Reducing energy consumption and climate change
- Reducing water consumption
- Reducing material, packaging and waste
- Protecting habitats and diversity
Some of these objectives, however, could result in non-compliance with current procurement legislation, particularly if you work within the public sector. One piece of legislation which affects the Public Sector in particular is the OJEU regulations.
Under this legislation it is seen as discriminatory to favour local suppliers despite the fact that the use of local suppliers would reduce freight impact – less fuel for example, and support the local economy.
So, how can we promote the local economy and reduce pollution and yet still comply? This may involve a bit of creative thinking, but here are a couple of examples.
- We could specify tight delivery times which would mean that it would difficult for suppliers who have long freight times to meet the requirements.
- We could specify regional varieties if procuring food stuffs which may only be available locally.
These and other methods are ways in which we can improve the chances of sustainable procurement. There are plenty more, of course, so we’ll be looking at these in a future article. Keep checking back for updates!
IWFM (BIFM) Qualifications
This article relates to the following IWFM (BIFM) Qualification Units:
- IWFM (BIFM) Level 3 in Facilities Management
- FM3.01 Introduction to Facilities Management
- FM3.02 CSR and Sustainability in Facilities Management
- FM3.04 Specification and Procurement of Facilities Supplies and Services
- IWFM (BIFM) Level 4 in Facilities Management
- FM4.01 Overview of Facilities Management
- FM4.19 Sustainability and Environmental Issues and their impact on Facilities Management
- FM4.21 Understanding Procurement and Contract Management in Facilities Management
- IWFM (BIFM) Level 5 in Facilities Management
- FM5.01 Facilities Management Developments and Trends
- FM5.21 Managing Procurement and Contracts in Facilities Management
- IWFM (BIFM) Level 6 in Facilities Management
- FM6.02 Facilities Management Governance and Risk
- FM6.11 Corporate Responsibility and Sustainable Facilities Management
- FM6.12 Procurement Strategy for Facilities Management