Comment: Getting the most out of eSourcing
Today’s procurement professionals are no strangers to the cost savings and efficiency gains that eSourcing enables. In fact, our survey of 200 procurement professionals found that 68% already benefit from the eSourcing module.
According to our research, of all the eProcurement modules, it’s eSourcing that is most widely used due to its ability to transform manual and laborious sourcing processes. However, if you’re yet to take the plunge, and are still building the business case for the software, it’s important to understand the added value that eSourcing provides to the whole business.
A third of our survey respondents said that they adopted eSourcing primarily to remove manual, paper-based processing and overheads from the supplier negotiation process. However, supplier compliance was highlighted as important to 60% of our respondents. eSourcing enables organisations to ensure that their suppliers adhere to strict criteria such as health & safety guidelines at the start of the eTendering process. Finally, for just over half of our respondents, being able to negotiate with suppliers on price, allowing for a consistent process to be set for driving savings across all spend categories, is an important consideration.
Delving deeper into the survey results revealed that for those currently using eSourcing, there was progress to be made when it comes to making the most of the technology. 49% of respondents indicated they were making significant progress with the adoption of eTenders, while 38% claim to be regularly using eAuctions to create a competitive supplier environment across a range of spend categories.
However, in spite of the need for more progress to be made with the functionality offered by eSourcing, estimates show that 82% of procurement professionals are saving on average £38 for every £10 invested in the software.
Our survey respondents also gave us some interesting insights into what it takes to successfully implement eSourcing:
- Gaining senior team buying is key to ensuring the technology is embraced by the entire organisation.
- Collaboration with users from outside the procurement department, including suppliers makes sure that the implementation works for all key stakeholders.
- Communication with suppliers on your eSourcing plans is crucial as some may already be up and running with the software, while others may need more help than others getting started.
- Don’t underestimate the importance of user training. It’s the most effective way for users to really appreciate the benefits of making the move to electronic sourcing.
- Make it clear exactly what benefits you anticipate will be delivered from eSourcing. By mapping out these key targets you can then report back to the business as and when they’re achieved.
- Finally, respondents said that the rollout should be a gradual process and that it’s important to remain agile as the implementation progresses.
Whether you’re still building the business case or taking full advantage of strategic sourcing, understanding how it can support the wider business and improve supplier efficiencies and compliance will help guarantee maximum return for your software investment.
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.”