Environmental Engineering Reference
In-Depth Information
tourism. The fact that around 40 per cent of spending goes on procurement and
yet there was so little understanding of the profile of the chain is unlikely to be
unique to Spier. In Spier's case, suppliers were paying very little attention to
sustainability issues apart from those requiring compliance. This again is likely to
be common. Spier was able to achieve a relatively rapid increase in procurement
from local, black owned and PDI suppliers between 2002 and 2006, albeit from a
low base. This is partly due to context. First the peculiarities of the post-apartheid
economy in South Africa might mean that there are greater market failures
preventing pro-poor procurement than in other countries. This means there are
more 'low hanging fruit' available to make a relatively rapid improvement when a
conscious effort is made. Secondly, Spier as a company was able to devote
substantial management time and commitment to change, probably beyond what
'typical' companies would do. Nevertheless, the shift does show how feasible
increases can be achieved with corporate commitment. Thus the tourism sector
more widely should be able to use its purchasing power to encourage behavioural
shifts within the supply chain.
A further reason for paying greater attention to supply chains comes from a
survey finding that the supply chain to Spier was less casualized than the opera-
tional side of the business. Given that quality employment is one of the oft-noted
development impacts of tourism, it is important for practitioners to note that this
may be better attained within the supply chain of the tourism industry as opposed
to the operational side of the industry. This contradicts a number of industry
related initiatives in South Africa seeking to enhance the impact of tourism by
setting up small tourism operators. These operators are often operating in
marginal markets, and are subject to the downsides of tourism, particularly the
seasonality of the tourism economy, the operational risks and levels of capital
needed for many services. These constraints limit the entry and success of small
and emerging entrepreneurs. The potential presented by the supply chain raises
questions about this focus, given the lack of focus on the supply chain side of the
tourism industry. The indications are that supply chain reform may have greater
potential for a more equitable distribution of tourism revenues.
The case of Spier also shows how important it is for a company that aspires to
be value-driven, or prides itself on integrating sustainability into its operation, to
actually understand its supplier profile. In all three cases (leisure, golf and wine),
the average sustainable development performance of suppliers fell below that of
the Spier company itself. And yet with procurement constituting such a large part
of the operation, it inevitably also constitutes a large part of the total societal
impact of the business.
It can be argued that Spier is not a typical company, in that it combines a
commercial pursuit of profit with strong societal values, and has been able to run
over the bottom line while investing in sustainability in a way that other companies
could not. Nevertheless, Spier's experience demonstrates a range of commercial
benefits that come from procurement reform, in which cost-saving is just one.
Spier has also gained in terms of reputation and local social licence, while inter-
nally benefiting from improved staff morale. Precisely because Spier has spent
Search WWH ::
Custom Search