Sustainable Procurement at Sncf: An Impressionist's Approach to Transformation

Abstract

With a global leadership and sustainability perspective, this case uses SNCF, a state-owned railway and public service company based in France, to set the stage for an analysis of change management in a large company. It also allows for an exploration of sustainable development within the context of a large company. Written from the field, it depicts the firm's overall strategy to adopt sustainable practices and provides an opportunity to introduce basic leadership, strategy, sustainability, and operational terms that can be explored in subsequent classes. The case opens with a summary of urgent issues that include pressure to present the accounting department with financial metrics to evaluate the sustainable procurement efforts, a public scandal around a supplier that employed undocumented workers, and an influential employee who resists new policies. In a big-picture view, Olivier Menuet, VP for sustainable development, and his boss, Pierre Pelouzet, CPO, want more visibility around sustainable development not only within the procurement function but throughout the organization. How might changes already made at SNCF be driven deeper into the company? Excerpt UVA-OB-1029 Rev. Apr. 4, 2014 SUSTAINABLE PROCUREMENT AT SNCF: AN IMPRESSIONIST'S APPROACH TO TRANSFORMATION With varying levels of support, Olivier Menuet, directeur delegue achats durables et solidaires (vice president for sustainable procurement), and his boss, Pierre Pelouzet, directeur des achats (chief procurement officer, or CPO), were pushing a new strategic direction for France's national railway, Societe Nationale des Chemins de fer Francais (SNCF), and its procurement practices. They wanted to implement a more aggressive sustainable procurement (SP) process—indeed, they had both been hired to do that. They believed not only that changing the way the railroad purchased would lead to a more efficient supply chain but that it was the right thing to do. Traditionally, railroad initiatives were driven by running trains on time and safely. As a whole, the railway industry considered the very nature of the work to be environmentally friendly; convincing an entire industry otherwise was a hefty ambition. By 2011, Menuet and his boss had achieved great strides in implementing SP, which they believed was instrumental to operational excellence. Some members of the SNCF leadership team supported it, some were open to it but not committed, and some had other strategies based on their own agendas. And Pelouzet and Menuet faced another challenge: neither had a railroad background or was from a railway family, what the French called cheminot. . . .