The Fourth Dimension In Strategic Sourcing: How Sustainability Can Drive Value

Procurement organizations feel the heat of macro risks—from supply-chain disruptions to labor shortages and natural disasters—but also stand on the threshold as actors who can find a better way to source and insulate their firms from these challenges. Traditionally, strategic sourcing has focused on three aspects: Quality, Service, and Price, but adding in a fourth dimension—Sustainability—gives firms the ability to improve resiliency and footprint without compromising on value.

As procurement organizations mature, stakeholders demand more from them, and expectations move from reputational and supply risk management to capability building. In the process of conducting hundreds of sourcing events for clients, we have found that good strategic sourcing strategies will align naturally with environmental, social, and governance (ESG) goals when the process designs in the right criteria.