Frank Omare – Driving Value from Sustainable Procurement

Frank Omare wants to make it clear that unlike many people who just fell into the profession, “I found procurement. I saw it as an exciting and interesting place to be”.  As a qualified chemical engineer, he worked in that discipline, then moved into manufacturing management roles in the food industry, before seeing that procurement and supply chain was where he wanted to focus his attention.

After a range of senior operational procurement roles, he joined leading technology firm SAP Ariba in 2013 and is now a senior director in the global “value advisory practice”. His role is to help customers and potential customers to identity the business value that using technology can bring, with a particular focus on sustainability and procurement with purpose issues.

He’s also been a force for change generally within SAP Ariba for some years, taking on the mantle of promoting sustainable procurement. “It was initially the environmental agenda that I felt passionate about – but now that has broadened out into a wider range of topics”.

There has also been a change in focus more widely in business. As he says, “firms have moved from focusing on compliance to more proactive thinking “.  He also makes an interesting point about the links between environmental issues and the “social” aspect of purposeful business. “There is a correlation between climate change and social issues. Global warming may bring famines or more refugees, problems that obviously affect people’s wellbeing”.  And, as Omare reminds us, “the most vulnerable, poorest people in the world are also those likely to be worst affected by climate change”.

That focus on wellbeing leads into consideration of issues such as modern slavery and human rights. “We should ask how and where our products are being made. What we buy affects many people in remote supply chains all over the world”.

But sustainability has matured as a concept “from the days when firms allowed staff volunteering hours to do socially useful activities”, and now the question is, “how can we use the power of our  brand in the market place to draw attention to social issues, such as discrimination, inequality or human rights”?

No single organisation can solve this, so firms need to have specific goals. That pressure to buy responsibly is coming from different stakeholders, but Omare sees that the aspirational strategies we read in annual reports, “are too often not backed up with a clear plan at operational level – what will actually be done”.  So more organisations are being called out for their actions (or lack of actions) and investors are getting interested, looking for firms to have appropriate strategies and plans. Often, Omare says, change is driven by new leadership. “We’ve seen clients where what seemed impossible, suddenly becomes possible,” when a passionate CEO arrives.

That takes us back to his role, helping customers to go through a “design thinking” process and work out how technology can help to achieve these wider goals. That might be using existing solutions rather than buying new products, but the aim is to use technology as a positive force. SAP has entered into various partnerships; we wrote about Givewith here, and Ecovadis (here) is another example.

“Technology can help with compliance – around modern slavery for instance. We suggest segmenting the supply base by risk, using AI tools and external ratings like Ecovadis. Where risk is high, firms might use audits, or more collaborative approaches to identify and mitigate risks. Today, excuses don’t hold water – this is essential to protect your brand”.

SAP Ariba is also running various pilots around its “Plastics Cloud”, launched in 2018. “Firms are being held accountable for plastic waste in the oceans and elsewhere. Retailers and manufacturers are looking to reduce waste and increase recycling”. So the Ariba network is a potential force for good, helping buyers to connect with recycled plastics suppliers and alternative supply sources.  

How does Omare see Covid changing the picture? “As we come through it, I think it will be more important than ever for brands to be associated with sustainability, if they want to appeal to the next generation of consumers – and motivate their own workforce”. Covid has made us all aware of injustices, and that some groups within society have been affected more than others.  We’ve even developed a heighted awareness that healthy eating comes back to social issues and gaps.

There has also been more direct learning in terms of procurement. “Covid has also taught us that many organisations didn’t understand their supply base. All it takes is one supplier to fail – perhaps a factory closes because of Covid – and an entire complex supply chain can fall apart in a domino effect”.

So we need to simplify and streamline our supply chains, Omare explains. That will mean a mix of global and local sourcing, and more consideration of social benefit and sustainability. “We’ll see a recalibration of operating models and supply strategies, more onshoring, more thinking about diversity in the supply chain, supporting local communities and social enterprises”.

Won’t this cost more? “Not necessarily. Simplification of supply chains can take out cost. It takes 29 companies from 18 countries to produce our typical cup of coffee. Couldn’t that be simplified”?

Perhaps taking out the “middleman” through better understanding of supply chains might mean we can afford to pay the actual growers of the crop more in some cases, he suggests. “Procurement needs to move away from aggregation and lowest price as the core strategy, and think more widely about society and the world. This is the opportunity for procurement to step up and have a real impact”.  

Technology will play its part too. Blockchain based tools will enable consumers to understand the provenance of what we are buying – “we’ll be able to scan what we are buying and immediately find out about its background, or the chances that modern slavery was involved”. We might even get a clear view of where margin is being made in the supply chain and the make-up of final prices. Big data will also support decisions such as local versus global sourcing options.

Technology will help in other ways, such as managing tail spend – “budget holders can carry out the procurement, but data can help them make informed decisions about supporting local firms or social enterprises”. Invoice payment is yet another interesting area. As Omare says, “there’s no need for blanket payment terms these days. You can pay smaller or vulnerable suppliers faster, and the tech can support you to do that”.

It appears that SAP as a firm really does have a genuinely purposeful approach, driven from the top, and demonstrated at various corporate events and through discussions we’ve had over recent years.  Frank Omare clearly lives and breathes those high-level aspirations, and is helping firms turn that vision into real action and positive outcomes.