How procurement practices affect sales and brand

Ethical selling and procurement is in the spotlight.

Harvey Norman’s recent publicity surrounding alleged sourcing and use of Australian native old growth forest timbers in Chinese-made furniture has drawn attention to retail procurement practices.

The retailer has been asked by activist groups NGO Markets for Change and GetUp.org.au to explain itself, with GetUp creating and distributing a viral advertisement No Harvey No via the internet after the Television Classification Board refused to classify the ad due to concerns about potential legal action.

GetUp has not been deterred and its internet advertisement has reached its nearly 600,000 viewers Australia-wide. Who’s right? Who’s wrong? What will be the impact? Who knows?

Regardless of whether GetUp or Harvey Norman are ethically and legally right in their actions the matter of ethical procurement practices it not going to go away.

People are asking questions more frequently about where goods come from, what they are made of, transportation miles, etc and many buyers are demanding that businesses act more responsibly when it comes to sourcing and distributing products.

Procurement is firmly in the spotlight and choices surrounding sourcing and distribution can have a dramatic effect on a company’s brand, reputation and sales revenue. 

Let’s look at another recent example of public influence.

Australia’s live export cattle trade is under intense scrutiny. Why did they let cattle go to these abattoirs? Didn’t they know about the poor work practices?  No one can escape the net.

Whether you’re sourcing product or supplying product it’s important to acknowledge that in the blink of an eye, the stroke of a key or the post of a tweet can put you and your practices under the microscope.

Sourcing, supply and distribution should never be simply about managing costs but also about managing consumer expectations.

Professional bodies such as The Chartered Institute of Purchasing and Supply are rightly asking questions about how we manage and guarantee supply in an ever changing, often unpredictable and volatile world that is laced with moral causes, principles and philosophies.

The messages are clear. People want frank, measurable, transparent and ethical selling and procurement practices that discourage inhumane and immoral practices, human and environmental degradation and exploitation, excessive consumption and greed. 

The focus is moving towards forging legitimate business relationships which serve the environment, people, business and communities, and recognising that “we’re all in this together”.

If we are to meet current economic, environmental and social demands and expectations without compromising the ability of future generations to meet their needs we need to engage in ethical and sustainable selling and procurement practices that support the concept of sustainable development as part of our business and community strategies moving forward.  

Do your procurement, distribution and selling practices stand you in good stead for the future? Could you stand up to the scrutiny experienced by Harvey Norman?

Remember, everybody lives by selling something.

Sue Barrett is managing director of www.barrett.com.au