The Hackett Group: embracing digitisation in procurement
With digitisation beginning to take hold over the supply chain world, many companies are turning to consultancy and advisory services for support.
That’s where the Hackett Group comes in. Offering intellectual property-based strategic consultancy, leading enterprise benchmarking and best practices in digital transformation, the Hackett Group provides firms with expert advice to succeed in the space amidst significant technological change in the industry.
Nic Walden, UK procurement programme leader at the Hackett Group, specialises in helping companies transform their procurement functions into becoming true strategic business enabling functions. “I’m working with many well known and large multinational companies on a continuous basis through our membership programmes,” says Walden. “We're utilising our best practice research and thought leadership to support procurement leadership teams, to help them better understand what’s changing in the business environment and what that means for the world-class future procurement function. We provide that external perspective and help guide their procurement function and transformation strategy to ultimately enable better decision making towards greater effectiveness, efficiency and experience.”
The Hackett Group empowers companies to accelerate their digital output in a range of different areas in procurement. “We utilise our experience and knowledge of proven best practices and emerging practices to help companies drive change and transform successfully at pace,” explains Walden. “It could be that procurement teams are being asked to take on new responsibilities or bring in new talent to shift their focus from pure cost savings to becoming more oriented around the supplier lifecycle. It’s up to us to ensure we’re providing the best advice on the latest trends in the marketplace, including the opportunities from new digital technology solutions.”
With a plethora of information available at companies’ fingertips, the importance of leveraging Big Data correctly is paramount to ensure businesses remain agile and lean towards the latest market conditions. “Big Data in procurement is a huge opportunity and, to a certain extent, remains largely untapped,” explains Walden. “One of the most pressing challenges we face is risk or disruption from the supply chain. It’s also important to evaluate whether we’re at risk from reputational damage or fraud. We should see how we're able to use Big Data sources like validation, risk and intelligence services. If we do, it will allow us to efficiently and effectively blend together external and internal market data to serve our category teams and supply managers delivered on a streamlined digital platform. From there, they can better manage supplier relationships and identify valuable opportunities.”
The Hackett Group has introduced “Digital Excelleration”, a digital gateway to measure performance excellence, accelerate business transformation and uncover breakthrough business insights. Along with this, the firm has outlined three steps to achieving digital excellence; benchmarking and best practices, strategic alignment and a transformation plan. The Hackett Group believes that its benchmarking and performance data can provide companies with a competitive advantage and highlights five digital capabilities that firms must master to succeed in the space: customer engagement, workforce enablement, service optimisation, a digital ecosystem and analytics-driven insights. With customer-centricity a key pillar for the Hackett Group, Walden stresses the importance of staying relevant to customers. “It’s vital that we continue to innovate and invest to further develop our services,” he explains. “We’re currently undergoing our own transformation internally within Hackett called ‘reimagining advisory.’ We're always looking for ways to become even more customer-centric and ensure we keep an eye on what’s important to them.”
Due to the rapidly changing nature of the supply chain industry, it can be difficult for companies to manage change effectively amidst constant upheaval. To combat this, Walden believes it’s important to assess the value that new technology brings and decide whether there is also the option to enhance existing processes and service offerings. “When we talk about digital, it's not just technology. We also need to think very carefully about the talent side,” explains Walden. “We know change management and skills development is important. However, there’s also a massive opportunity within procurement today to benefit from modernising our technology landscape. Many even have a hidden opportunity to further extend existing technology to suppliers or to train on functionality.” Having witnessed the shift to digital first-hand over the past few years, Walden believes he has a clear idea of what the supply chain space will look like in the near future. “I noticed how influential technology was becoming three or four years ago in our field,” he says. “At the start, we were all very curious to better understand what the opportunities were and perhaps got caught up with the hype around AI, robots and blockchain. However, in order for industry to fully embrace all this new tech in a positive way, we must recognise that it might take longer than originally thought.”
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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.”