CIPS: Digitalisation in Procurement and Supply 2019
With technology becoming increasingly influential in the supply chain space and beyond, companies are doing whatever they can in order to maintain a competitive edge.
Businesses adopt technology for a range of reasons. It could be to increase efficiency, trial new systems or simply to keep up with the latest trends, however, it’s important that businesses consider what they introduce to ensure that they enhance existing processes.
The Chartered Institute of Procurement & Supply (CIPS) released significant findings about how digitalisation is affecting companies’ supply chain strategies. The research saw more than 700 managers in over 20 different industries from 55 different countries take part was carried out in order to gain an insight into the level of understanding of the supply chain digitalisation in procurement and the wider business community.
- CIPS launches Corporate Award Program in Italy
- UK government partners with CIPS
- African Development Bank receives CIPS procurement award
- Read the latest issue of Supply Chain Digital here!
Over 90% of the firms surveyed have adopted at least one of the Industry 4.0 technologies with cloud computing, Internet of Things (IoT) and Big Data considered the most popular ones.
Around 60% of the companies recognise transparency, cost effectiveness and being customer-centric as key gains brought by procurement and supply chain digitalisation.
90% of the firms are primarily motivated by decreased operational costs and increased efficiency to pursue digitalisation strategies.
Around 40% of the firms find technical setup costs, long development times, lack of coordination and ongoing support costs to be challenges when pursuing and implementing procurement and supply chain digitalisation.
It was found that there are predominantly 11 digital enablers used to change conventional practices of procurement and supply chain in production systems. These are: 3D printing, artificial intelligence (AI), augmented reality (AR), Big Data, cloud computing, IoT, omni channel, FRID, robotics, sensor technology and simulation.
The findings conclude that with more information and data than ever available at companies’ fingertips, it is important that businesses remain vigilant to find new ways to create value. With AI and AR expected to accelerate in usage, businesses could invest in the technology now to reap benefits later down the line.
To read the full report, click here!
For more information on all topics for Procurement, Supply Chain & Logistics - please take a look at the latest edition of Supply Chain Digital magazine.
EU and US agree end to Airbus-Boeing supply chain tariffs
The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic.
Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years.
It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC.
The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn.
In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products.
Boeing-Airbus dispute by the numbers
- The dispute began in 2004
- Tariffs suspended for 5 years
- $11.5bn worth of goods affected by tariffs
- $3.3bn in duties paid by businesses to date
- 15% levy on aircraft and 25% on non-aircraft goods suspended
Both sides welcome end to tariffs
European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.
“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.
Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”.
The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."
This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.
Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”