CPOs claim short-term goals undermine long-term value
The recent ‘2013 Procurement & Strategic Sourcing Data Survey’, which was compiled in partnership with Vantage Partners, revealed that the majority (65 percent) of CPOs focus on using competitive pressure to get maximum value from suppliers, rather than using collaboration to achieve the same results (35 percent).
“Chief Procurement Officers are challenged with the task of driving savings and delivering critical resources with maximum value,” said Paul Mandell, Founder & CEO of Consero. “Our survey reveals a conflict for Chief Procurement Officers, who want to obtain the best overall value, yet often rely on competitive pressure rather than collaboration. Procurement officers should communicate to senior management that pursuing unreasonable short-term savings can be destructive to long-term value.”
Pressure on CPOs
The role of the CPO is a challenging one, according to the survey results, which revealed that 45 percent of respondents feel they do not have enough resources to manage the procurement function effectively, and a significant minority (34 percent) experiencing a budget decrease.
Controversially, nearly half of surveyed participants claimed that social responsibility and sustainability were ‘not important’ or only ‘slightly important’
“These findings are indicative of economic weakness, as a significant portion of respondents say they lack sufficient resources to manage effectively, and many companies continue to put issues like sustainability and social responsibility on the back burner,” said Mandell.
The 2013 Chief Procurement Officer Data Survey, presented in partnership with Vantage Partners, LLC, was comprised of 16 questions that were posed to a group of Fortune 1000 Chief Procurement Officers who were in attendance at an invitation-only event hosted by Consero in January 2013. A total of 42 responses were provided.
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.”