Question

Empowering Procurement Professionals The Challenge With a vast spread of teams and projects conducted around the world, AB InBev saw the opportunity to understand how category procurement teams could enhance their everyday purchasing decisions by aligning more closely with the company's broader social responsibility environmental objectives, known as "Better World." AB InBev partnered with BSR's Center for Sustainable Procurement (CSP) to explore how to improve the way sustainability is integrated into procurement activities. The term "sustainability" has a broad meaning and can often be misunderstood. Therefore, AB InBev decided to enhance awareness around how its procurement teams can contribute to the company's Better World actions by providing direct value—in particular, by lowering environmental and social risks across the value chain. The Strategy In 2013, led by AB InBev’s Responsible Sourcing function, the company began creating awareness training to improve the level of understanding of sustainability among procurement professionals around the world. The training sought to link the procurement team’s daily activities and responsibilities with: • Efforts conducted by AB InBev’s Better World department, which manages the company’s social responsibility programs • AB InBev’s external-facing Better World goals and how they are relevant to specific procurement categories • The relevance of AB InBev’s social and environmental compliance efforts across key procurement categories During the training, procurement teams learned about key sustainability issues, as well as local laws and regulations relevant to their areas of responsibility. Procurement teams were also taken through facilitated dialogues and brainstorming exercises to think through how they could apply a sustainability lens on different procurement categories and still have an impact on traditional business drivers (e.g., cost, efficiency, compliance). A key goal of the training was not only to inform procurement teams about relevant issues and regulations, but also to spur ideas on potential alternatives to bringing business value through the procurement function and, ultimately, complement the financial business case. The Impact During 2014, more than 150 procurement professionals were successfully trained worldwide, creating greater awareness of the value of sustainability to procurement. The training also helped improve cross-functional relationships and communication between the sustainability teams and procurement teams, which, for example, has led to a project that studied the potential impacts and value of more sustainable packaging. In addition, AB InBev’s global environmental goal owners for barley water management, packaging reductions, eco-fridges, and logistics conducted focused awareness and training activities to support goal achievement. Procurement teams are now using the concepts and ideas learned in the training to regularly challenge procurement categories, recommend new opportunities and procurement alternatives that simultaneously deliver business value, and contribute to the company’s Better World goals.

1. Discuss the value of Sustainability, which will serve the company well in the years to come?

2. Explain the benefits that AB InBev will get by changing category strategies by incorporating sustainability criteria more explicitly into procurement processes?

Answer 1

Answer 1- The term sustainability has a very broad meaning and in most of the cases, it is misunderstood by the people. Thus the attempts were made by AB InBev to improve the awareness about the contribution of the procurement team in improving the action of the company to add more direct value through the decrease in environmental and social risks in the value chain. This strategy was further boosted by the Responsible Sourcing function of AB InBev in which the awareness was spread by the company to have a better understanding of the sustainability among the procurement employees all over the world. The aim was to have the connection between the daily activity of the procurement team and responsibility with different initiative taken by the company’s management of social responsibility program, deal with the external goals and relevance to the procurement categories

Answer 2- The focus of AB InBev was to modify the change strategy with the help of implementing the sustainability criteria particularly in the procurement activities. This will have a better connection between the internal policies and practices with the probable actions of the supplier and provide added power to the category managers supported by the greater prove and methods to improve the procurement decisions This is more useful for the millennial procurement professionals and thus added the transparency in the company. This will result in cross-functional relationships and communication between the sustainability teams and procurement teams