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The Catalyst for Sustainable and Strategic Procurement

In today’s interconnected and globalized economy, the complexity of supply chains has made supplier relationship management (SRM) more crucial than ever.

In today’s interconnected and globalized economy, the complexity of supply chains has made supplier relationship management (SRM) more crucial than ever. However, effectively managing SRM presents significant challenges, requiring companies to adopt a proactive and strategic approach.

 

Recent research by Amazon Business, to be released in November, shows that Manufacturing leaders are more worried about supplier capacity than they were last year, with 64% citing supply chain shortages as their top industry challenge. Both procurement decision makers (23%) and leaders (24%) agree that suppliers who can’t support digital procurement needs is their greatest procurement challenge facing the industry. However, with 35% of leaders stating that procurement’s greatest value to the organization is their ability to enhance supplier relationships and collaborations, the pressure is on to bridge these widening gaps.

 

Manufacturing procurement leaders want reliable suppliers that can support modern digital procurement needs, provide visibility into their inventory, and ensure on-time delivery. That’s why Amazon Business brings together a broad range of trusted suppliers offering certified sustainable products, many of whom have recognized small, local, or diverse certifications. All backed by our reliable, customizable delivery options.

 

As companies navigate the complexities of supplier relationships, Amazon Business has focused on providing a seamless, efficient way to manage spending and adhere to purchasing agreements. “We are providing a comprehensive solution for companies looking to optimize their supplier relationships,” says Anthony Jenkins, senior product manager for sustainability at Amazon Business. “By leveraging our innovative tools and extensive supplier network, businesses can achieve greater control, compliance and sustainability in their procurement processes, setting the stage for long-term success in supplier management.”

“By leveraging our innovative tools and extensive supplier network, businesses can achieve greater control, compliance and sustainability in their procurement processes, setting the stage for long-term success in supplier management.”

— Anthony Jenkins, Sr. Product Manager for Sustainability, Amazon Business

Setting the Bar for Successful Supplier Relationships

The vast network of suppliers accessible through Amazon Business allows organizations to diversify their supplier base, reducing the risk of over-reliance on a single partner. Diversity injects resilience into supply chain relationships, ensuring businesses remain agile and adaptable in a constantly changing marketplace. Tools like Bulk Buying and Request for Quote (RFQ) simplify negotiations while offering organizations the best prices for high-volume purchases and improving procurement efficiency.

 

For organizations that would like to consolidate their vendors, Amazon Business offers a supplier analysis service for enterprise customers, available upon request. It offers a comprehensive deep dive showing where teams spend with non-strategic vendors and identifying opportunities to consolidate.

 

Further, organizations can set, manage, and update purchasing policies through a robust suite of tools, such as purchasing and approval policies, Amazon Business Analytics, and Business Prime features such as Guided Buying and Spend Visibility. These tools empower buyers to make informed decisions that align with their organization’s strategic goals, reducing contract leakage and ensuring compliance.

 

Paving the way for More Responsible Purchasing

Amazon Business has developed a comprehensive strategy to ensure vendors meet environmental, social and governance (ESG) criteria with a transparent certification process. “We partner with over 45 third-party certifications,” says Jenkins, “including governmental agencies, non-profits, and independent laboratories, and created four of our own certifications to help us distinguish more sustainable products. We also regularly check in and reassess the certification landscape to make sure we're partnering with the best to help you shop for more sustainable options.”

 

One example of Amazon’s own certifications is the Compact by Design certification, which highlights products engineered for efficiency. These may appear similar to others but use less water and air in their packaging, leading to reduced carbon emissions when produced on a large scale. By evaluating attributes like package size, weight and unit efficiency, Amazon Business can identify products that are environmentally friendly without compromising performance.

 

When combined with robust analytics, these industry-recognized certifications make it easy for procurement leaders to report on responsible purchasing activities and ensure suppliers are meeting their organization’s ESG requirements.

 

Leading the Charge in Ethical Sourcing

Amazon Business works closely with its sellers and vendors to help them improve their sustainability practices, offering resources, guidance, and incentives to help sellers boost their environmental performance, reduce waste, and embrace more sustainable business practices.

 

Amazon Business provides resources, guidance and incentives to encourage these partners to enhance their sustainability practices, aiming to drive positive change throughout the supply chain. One such initiative is the Climate Pledge Friendly program, which has seen a 157% increase in certified sustainable products, offering customers over 1.4 million eco-friendly options. Additionally, Amazon Business has introduced features that enable customers to make environmentally conscious decisions, such as limiting single-use plastics and customizing delivery options to reduce waste.

 

Through these efforts, Amazon Business meets evolving sustainability demands and sets a standard for ethical business practices, helping customers achieve their goals and positively impacting the environment and society.

 

Originally published in Manufacturing Technology Insights.

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