How have price comparison websites impacted the supply chain?
Today, procurement involves the process of choosing vendors, e...
Procurement is an ever-changing term that comes with a similarly fluid job description.
Today, procurement involves the process of choosing vendors, establishing payment terms, vetting the vendors and negotiating contracts to purchase goods or services. Tomorrow, who knows what the definition of procurement could be?
Organisations are using technology to procure more effectively than ever before and it is the job of the SME to find ways to streamline this process further. Price comparison websites (PCWs) are leading the charge in this new future and proving that procurement is still as valuable as it once was.
Is procurement still valuable?
In days gone by, procurement was done via a sales team, who a procurement team would negotiate with to find the best deal available. In this new era, however, the price comparison website is undercutting sales in finding the real best deals.
In the managed print services industry, price comparison sites have revolutionised the way that procurement managers source their print contracts, for example. Rather than having sales representatives from brands pushing to convert a sale, PCWs have cut out the middleman, allowing procurement teams to quickly see which print contracts best suit their businesses needs. From there, the team can effectively budget for and obtain the best-managed print contract for them.
While procurement teams typically aim to build good relationships with the brands and services that they are looking to use, this can be time-consuming. A PCW can quickly show which brands are worth partnering with and buying from based on the needs of the business.
How have PCWs impacted the B2B supply chain?
The growth of the PCW industry has made the job of the procurement manager much more manageable. Whereas previously a business would be waiting for a sales team to handle a contract, ManagedPrintCompare.com dramatically reduces the amount of time a business is waiting in the supply chain by handing print suppliers already signed contracts. The speed in which businesses can now procure goods through PCWs is an important innovation.
PCWs also work well with scalability. While some procurement teams refuse to work with partners who are too small, or too large for their needs, the price comparison site can scale its results to an appropriate size.
PCWs have already proven themselves to be an invaluable aid in the B2C market, where consumers have demonstrated their popularity. Popular sites such as CompareTheMarket and GoCompare have helped millions of people find the best car insurance, gas and electricity deals, and now the industry is moving towards B2B clients.
Certain sites are now helping businesses find the best business rates on gas, electricity and internet. The move to support B2B clients is another evolution of the industry and is certainly set to expand further in the future.
A clearer view of the supply chain
One important characteristic that PCWs bring to the supply chain is the ability to see a more transparent view of the industry. A PCW doesn’t care about individual sales teams, only giving the user the best deals based on the data that they’ve shared.
A sales team will usually muddy the water to make a sale, claiming that their product is better than everyone else’s, but that isn’t always the case. A PCW will always be transparent by showing what the actual best deal is.
The price comparison website is certainly looking to innovate the procurement process and the supply chain industry. While they may just be getting started, history has taught us that innovation in the supply chain doesn’t take long. Watch this space.
By Michael Coulson, Founder and Managing Director of ManagedPrintCompare.com
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.”