For green tech companies, Procurement needs to be agile and global, with impeccably sustainable supply chains - and Canopy delivers
Green technology provides cutting-edge solutions to some of the world's biggest problems. Some green tech companies will be engineering solutions to reduce the climate impact of existing production processes. Some will be focusing on clean energy production, the use of alternative fuels, and technologies that are less harmful to the environment than fossil fuels. And some will be assisting other companies in making their supply chains more environmentally friendly. Whatever the products or services they offer, green tech companies themselves need to make sure that they are operating as efficiently and sustainably as possible. In this blog, we look at how Canopy can help companies in the sector sort out their supplier management.
What makes green tech special
In a developing business landscape, green tech companies need to move fast and be agile. This means it's essential to streamline processes throughout their business, including in procurement. Many companies in the green tech sector have developed through M&A activity, so may be using several different legacy ERPs or other procurement systems. This can make it particularly difficult to manage risk and ensure that different subsidiaries or group companies are meeting compliance requirements. And green tech businesses often operate both internationally and hyper-locally. Not only must they bear in mind the different jurisdictions and regulations that govern their procurement activity. They also need a level of local control to ensure that suppliers are compliant within geographies.
Crucially, companies in the green tech sector need to know their supply chains are sustainable. Along with the rest of the economy, the sector is under pressure to deliver net zero carbon across every part of its operations. There is an international recognition that there are different scopes to these emissions, depending on how directly a company can influence the level of emissions. When the business model is focused on delivering sustainable solutions to climate challenges, it's especially important to have a consistent focus on ESG criteria, to limit indirect ('Scope 3') contributions.
Sustainable supplier management processes with Canopy
Canopy can help green technology companies improve their supplier management to streamline their processes and meet their own business goals.
1. Streamline onboarding to reduce admin burden
Many green tech companies have admin-heavy onboarding processes. The manual manipulation of data will often require multiple points of approval to pick up any potential human error. And there may be legacy onboarding processes across different subsidiaries which are difficult to reconcile, leading to difficulties in sharing data across an organisation. Canopy pushes the burden of data collection to the supplier. It’s in their interest to ensure the critical information green tech relies on is protected by their guarantee. And that frees up green tech Procurement to add more value.
2. One supplier management platform across disparate systems
What happens when two (or more) green tech companies using different ERP systems merge? It's a complex and time-consuming process to merge and manage legacy ERPs, so companies will typically run ERP systems in silos by subsidiary. The Canopy platform can populate multiple ERP systems within one company with data, as the API or batch processing can push and pull data to and from ERPs. The front page of the platform has all the information on suppliers in one place (the vendor master record), regardless of the ERP(s) that sits behind the data. That means there's cross-company access to a database of approved vendors and preferred suppliers.
3. Get on top of contract lifecycle management
For many green tech companies, ongoing supplier management can be problematic. There's no capability to manage insurance, licences, and permits of vendors, let alone contracts, raising the risks of dealing with non-compliant suppliers. Vendor management for each supplier across their lifecycle imposes indirect costs through performance data development and risk mitigation. Canopy offers complete visibility of all supplier information through the vendor master record, together with automation that removes the heavy admin burden of ongoing supplier management. As well as autonomous reminders on documentations and contract expiries to keep data up to date, there's the immediate capability to stop accessible use of suppliers if compliance breached. With live data feeds from suppliers, data uploads, and API’s/third party feeds. Canopy makes formal performance and feedback capabilities on suppliers standard without manual intervention.
4. International yet local
Green tech companies operating globally need to respond to market dynamics, such as language, legislation, and local labour practices. At the same time, they need to ensure suppliers operating at individual sites are compliant to minimise risk. Canopy puts supplier decision-making in the hands of operators on the ground, based within a centrally defined governance framework. For the bigger picture, the platform's rules-based architecture allows for adaptations responding to different market conditions. At the same time, it's particularly suited to companies with locally managed purchasing decisions and suppliers who require on-site access. This location-based management supports the expansion or diversification of supply bases as necessary.
5. Sustainability and ESG reporting
Green tech companies must constantly burnish their own sustainability credentials. Canopy helps to facilitate this process. It provides a universal interface between green tech and all their suppliers, allowing for ongoing reporting and monitoring against ESG commitments. Category management takes consideration of all the aspects of a supplier’s activity, informing decisions about Preferred Supplier status or expanding/reducing the number of suppliers. And ultimately, that aids any efforts green tech is making to calculate overall aggregated emissions to meet their own ESG goals. Green tech companies can demonstrate supply chain compliance upstream to clients. After all, for green tech to work, it's got to be consistent with climate goals.
To find out more about how Canopy's supplier management platform can help companies in the green tech sector, contact one of the team today.
Post by Nick Verkroost
Nick is an experienced business leader and the CEO for Canopy (OCG Software), the rules-based Supplier Management platform. Nick's focus is on commercial and operational excellence and ensuring our clients maximise the opportunities that Canopy offers.