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Supply-chain development Roland July 26, 2023
Supply-chain development

Summary

The completion report for Work Package (WP) 5 of the Supplier Criteria & Procurement System Pilot Project provides a comprehensive overview of the project's objectives, process, and outcomes. The report underscores significance of engaging suppliers in discussions on circularity and sustainability, and presents key findings and recommendations for future endeavors.

The report outlines the goals of WP 5, which include establishing a procurement process and system for circular businesses and defining criteria for selecting and engaging suppliers, with an emphasis on environmental, social, and financial safeguards. It then proceeds to summarize project's methodology, which involved reviewing existing circular procurement frameworks, evaluating Riversimple's supply chain, and actively seeking feedback from suppliers regarding the draft criteria.

Feedback from collaborative research partners reveals their positive reception of the intervention criteria. The report also presents results of an online survey conducted with suppliers, which provides valuable insights. The survey responses indicate that suppliers perceive their relationships with procurers as fledgling relational partnerships, with room for improvement. The report suggests that having a pioneering customer like Riversimple, driving the changes and providing economies of scale, can accelerate transition to a circular supply chain for suppliers. Additionally, the survey sheds light on interventions implemented by suppliers in various areas.

Circular Criteria Graphic

Key learnings

The circular supplier criteria proved to be a simple and accessible method for engaging suppliers in conversation around the circularity and sustainability of their products and services. The interventions were presented as examples of potential improvements and opportunities for co-design and innovation with Riversimple rather than criteria to be met as part of compliance.

The process of engaging suppliers in conversations on circularity and sustainability was as important as the criteria themselves. The automotive industry is typically conservative and risk averse therefore challenging business as usual mindset required careful relationship management. Beginning discussions around what challenges and risk suppliers were facing and how CE might help them meet these challenges proved to be a successful approach.

On-boarding and educating suppliers on the key aims of the circular economy and how these criteria can help them be more sustainable is also important aspect of this process.

Sale of service businesses model was shown not to be appropriate for all suppliers or components within vehicle. Exploring the most suitable combination of 'business model’ and ‘design’ or ‘infrastructure’ interventions would be part of the supplier on-boarding and/or tendering process.

The ‘must have’ interventions identified to be a preferred supplier can be tweaked and tailored to specific products and components depending on their lifespan and use case. For Riversimple’s vehicle these were determined to be most appropriate.

Circular supplier criteria and process

Based on the key learnings of the project, below is summarised process for how to go about engaging suppliers on circular economy strategies and thinking.

  1. Define the circular criteria
    1. Review existing frameworks on CE and sector specific strategies
    2. Create draft criteria and define what good looks like
  2. On-board onto the approach and mindset
    1. Conduct meetings to gauge interest with suppliers
    2. Set a baseline – find out what they are already doing (surveys etc)
    3. Present the criteria and gather feedback on what steps to take
  3. Collaborate on solutions
    1. Discuss functional requirements and explore solutions
    2. Conduct research and/or re-design offering
    3. Agree contracts, minimum requirements and metrics
  4. Measure and evaluate progress
    1. Review offering and performance against agreed CE metrics
    2. Re-design and adapt if necessary

This project has carried out steps 1 and 2 of this process and step 3 and 4 will need to be carried out by Riversimple moving forward.

Future work

When implemented appropriate metrics and processes would need to be agreed on how measure progress towards these criteria. These would be built in as part of contracts agreed with the suppliers.

On-boarding suppliers onto the block chain requires more investigation. It is recommended that Riversimple begin with a key stakeholder or supplier that would benefit from receiving key performance metrics of their product in real time or a supplier who is already interested in in service based contracting.

Specific circular interventions such as ‘Design’ or ‘Material’ could be grouped and applied to particular products or components moving forward. This would need to be determined by Riversimple but could be implemented as part of longer-term target circularity strategy to ensure the circularity of their vehicle.

Conclusion

This project defined a new circular criteria and process for engaging suppliers in circular economy business models such as sale of service enabled by blockchain. It created a practical set of interventions that can be used by Riversimple to engage their future suppliers on what circular strategies are important and what type of relationships they are hoping to have with them long term. It also provides key insights into how to go about on-boarding suppliers towards circular innovation thinking.