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Australia Post: Delivering Outcomes through Social Enterprise Procurement

August 15, 2017

Last updated on March 20, 2018

On Tuesday 18th July, Australia Post was announced as a multiple award winner at the Chartered Institute of Procurement & Supply (CIPS) Supply Management Awards 2017.  Demonstrating the organisations innovative approach to corporate social responsibility (CSR) & social procurement, Australia Post was awarded the ‘Best Contribution to Social Responsibility’ and ‘Procurement and Supply Team of the Year’.

Forming a critical part of their corporate responsibility strategy, Australia Post has been a member of Social Traders since 2015, generating positive social impact in Australia communities through the incorporation of social enterprises into their supply chains.

In the following interview, Steve Hansen, Strategic Sourcing Lead for Fleet, Logistics and Automation, and Stephanie Roache, Corporate Responsibility Manager share their experiences and learnings working with social enterprises.

How have you engaged the Australia Post procurement team in generating outcomes?

SH: One thing that we’ve done that’s unique from any other large corporate business is merge our procurement team with our environment team. That causes a whole different way of thinking about things because you have those passions sitting right next to each other. They can bounce ideas around which you may not have otherwise considered and it’s now in the forefront of everything we do. We’re starting to see that even people who didn’t ever think about the environmental impact or the social or Indigenous impact are starting to ask questions. It’s made a big difference.

What are some targets for social procurement that you’re looking to achieve?

SR: As part of our new Reconciliation Action Plan we have a $40m target for Indigenous procurement spend. When it comes to social enterprise procurement, we haven’t set a hard target yet but as we mature and can see what’s in the pipeline we will be able to introduce a hard target.

We now have 35 Indigenous and social enterprise businesses in our supply chain and our spend this year was $5.6m, up from last year which was $1.7m.

In our procurement scorecards last year, we also had a KPI to find five new ‘social businesses’ – either Indigenous or social enterprise businesses – to introduce into the supply chain across the whole procurement team.

SH: We’re setting our targets now for the next financial year and that’ll include Indigenous spend but I’d also like that to include some social enterprise spend as well because in my mind they’re different. They’re different in their benefit and they’re different in the expertise they bring to the table.

What role has Social Traders played in helping you to grow your social procurement activity?

SH: It’s helped us to connect more than anything else. It’s bringing the ability to understand who’s out there rather than us having to do that leg work. I think that’s one of the biggest benefits you can bring to the table, is in making that connection.

SR: Every time you go to an event or speak to Social Traders, you also learn more and you get better at selling social enterprise internally back into the business. Being connected to Social Traders helps you keep up to date and evolve as the sector does.

Internally, how have staff engaged with social procurement?

SH: It’s giving people a different way of connecting to what they do. Particularly with the Indigenous businesses, I’ve seen real changes in people’s attitudes. For example, our relationship with the social enterprise Mambourin who employ people with disabilities, we’ve seen really good employee engagement and excitement that people wouldn’t have had for another large scale warehouse provider. They want to make sure they get paid on time because it does this extra good.

The conversations you have around the barbecue on a Sunday aren’t about the big contracts you did with other corporates, it’s about the contracts you gave to an Indigenous cleaning agent or the warehousing provider who’s generating social benefits in the community.

SR: We’ve also seen a massive increase in social enterprise spend in catering, not just for the events we run but more broadly across the business, we’re seeing people picking it up and doing it. We’ve also got staff coming up to us with new ideas of how we can outsource different things to social enterprises.

How did it feel to have your social procurement activities recognised at the Chartered Institute of Procurement & Supply (CIPS) Supply Management Awards 2017?

SH: It’s great, we do it to make a difference in the community  but it’s nice to be recognised and the recognition will help us to push it further. Hopefully, it sets a bar for other Procurement Teams who will want to beat us next year. Winning the two awards also allows us to prove that we’re putting our money where our mouth is in terms of contracts and we can include it in our tender bid submissions. If it helps us win new business from our customers by delivering a real difference then the whole company will get behind it.

SR: We’re not that great at talking about the positive and great things we do, we get caught up in being reactive to the service issues and challenges, so recognition through Awards help you have that conversation.

What areas are you looking to target for social procurement?

SR: I think there’s lots of opportunities in facilities management because it’s a big national spend. I can also really see data management and digitisation of information working well too as there’s so many tasks that could be well managed by a social enterprise. Fleet is another area that we’re looking at.

Australia Post is a buyer member of Social Traders’ Connect. Find out more information on ST Connect membership.

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