Coupa Software: four tips for reducing supply chain risk
The cloud platform for business spend management, Coupa Software, drives “Value as a Service” by helping customers to achieve significant cost savings.
As is the case with every supply chain, there is always risks that must be considered. These risks could be financial, cyber, legal or fraud and business leaders have a responsibility to consistently work to overcome these risks. Coupa has compiled four spend management decisions to help cut supply chain risk.
1. Automate compliance verification
In order to decrease risk in company’s supply chains, organisations must ensure is audit-ready and fully compliant. There’s an importance to ensure every vendor is compliant with relevant standards and observe the tolerance for risk. The process includes checking vendor credit ratings, financial liabilities, legal judgements as well as other details. It’s vital to automate this work to streamline processes and ensuring finances teams are not tied down with time-consuming tasks like fact checking; but are freer to create more value.
2. Utilise the insights of the business community
With some companies undergoing regular checks on its vendors to obtain credit reports from third-party sources, best-of-breed business service management (BSM) technology accelerates this. Based on a range of sources such as income statements, court documents and news articles, BSM algorithms quantifies financial, judicial and public sentiment health of each supplier. This information is then combined alongside collective reviews of customers which creates a comprehensive risk score for all suppliers in the database.
3. Enable real-time visibility for spend-at-risk
Recognising and understand the risk that comes from each supplier is vital to ensuring information is married with the actual spend of the organisation. In the supply chain space, being proactive is key due to the pace of which the world moves. By operating with an agile approach, it allows businesses to adapt to situations that weren’t accounted for, such as trade sanctions, currency fluctuations and natural disasters. By implementing real-time data, procurement and payment processes allow an instant update to the latest data.
4. Control in-flight transactions to mitigate risk
The importance of supply availability is key. Understanding and identifying these risks before they develop is vital to ensuring businesses protect guard against such threats. BSM processes should enable clear visibility of transactions that are linked with supplier risk. Modern platforms monitor risks, prioritise serious vulnerabilities and provide next steps to deal with risk efficiently.
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.”