May 17, 2020

Infographic: reinventing direct procurement, by E2open

Supply Chain Digital
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Freddie Pierce
2 min
E2open infographic
By David Maund, Vice President Professional Services EMEA, E2open (see below for infographic) In todays complex operating environment managing cost is...

By David Maund, Vice President Professional Services EMEA, E2open

(see below for infographic)

In today’s complex operating environment managing cost is key but it’s not the only aspect of the business that’s top-of-mind for senior supply chain executives as they look to maintain competitive advantage. Based on the results of a study entitled, Re-inventing Direct Procurement, which was conducted by Spend Matters and the Institute of Supply Management, this infographic illustrates how and where top-performing direct procurement organizations are exerting their influence and leadership on the broader extended supply chain.

Today’s business climate is a demand-driven model that is exposed to a great deal of market volatility since supply networks are global in scope and heavily interconnected. Given the inherent amount of risk tied to this model, its mitigation is paramount to a company’s success. Multi-tier visibility, where a business can see its suppliers’ suppliers, affords a greater level of information to combat this risk and is vital to the direct procurement process as it relates to the trading partner base.

Now more than ever, the goals of a direct procurement organization need to be in sync with operational goals as a strategic way to add value and to continue improving revenue and growth. As the research illustrates, there are a number of other strategic drivers impacting direct procurement beyond cost control. This leaves a wide margin for continued improvement, which can ultimately enhance overall business performance.

For example, areas such as continuity of supply (i.e., what a business needs at any given point in time) and strategic collaboration with suppliers (i.e., getting the materials in the precise timeframe that a business needs them) are critical. European enterprises are realizing the value of a taking a more strategic view to direct materials procurement. Companies like Vodafone, HP and others are collaborating closely with their suppliers to enable not just short term efficiencies but long term and sustainable partnerships.

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Jun 16, 2021

EU and US agree end to Airbus-Boeing supply chain tariffs

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Boeing
Airbus
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3 min
Supply chains embroiled in Airbus-Boeing dispute will no longer be impacted by $11.5bn tariffs imposed on food and beverage, aircraft and tobacco

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.”

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