New Years Procurement Resolutions
The past year was no walk in the park for procurement. Economic volatility and supplier disruptions struck global supply chains hard in 2011, intensifying the pressure on procurement professionals to cut costs and boost organizational profitability.
As 2011 comes to a close, the New Year marks a perfect time for procurement teams to create a new strategy for thriving in today's economic landscape. A few of the top resolutions for the year ahead -- according to a new report issued by BravoSolution, the spend analysis and strategic sourcing company -- include boosting company valuations, increasing procurement's internal stake in organizational strategy and enhancing supplier collaboration.
“Unlike most New Year resolutions we set for ourselves, this report outlines ten practical ideas that procurement can realistically embrace in 2012,” explains Peter Smith, author of the report and Managing Editor of Spend Matters UK/Europe. “Now more than ever, procurement needs to gain important buy-in from CEOs, CFOs and other top department executives to understand the role they will play in the larger business picture in the coming year.”
The report, available here, is offered free of charge by BravoSolution. Here's a look at a few resolutions to kick off the year:
-- Sit down with your five most-difficult stakeholders. Dealing with internal stakeholders can be more difficult than dealing with suppliers, but blaming stakeholders for non compliance and a lack of understanding of your company's procurement vision won't solve the problem. Instead, challenge yourself to sit down with these crucial partners and share your challenges, needs and procurement goals -- rather than expecting them to just “get it.”
-- Put the supplier at the heart of the process and technology. Typically when a supplier fails, procurement fails in the eyes of IT, marketing and production executives. To overcome this issue, focus on supplier information, risk, development and relationship management. The new mantra for 2012: your suppliers are your organization’s competitive advantage.
-- Start using market-informed sourcing -- or boost your adoption. Market-informed sourcing is proven to boost category savings up to 30 per cent, but adoption is still extremely low. This new approach empowers suppliers to get creative in meeting company needs, minimizes the burden placed on procurement staff and creates truly collaborative partnerships between suppliers.
“Cost cutting will always be procurement's most critical function, but there's an even greater opportunity for executives to become more involved in the strategic vision of their organization,” said Richard Hogg, Account Director at BravoSolution. “Our primary resolution for 2012 is empowering the procurement professionals we work with to leave a more impactful mark on the company's bottom line and help them drive their businesses forward.”
Edited by Kevin Scarpati
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.”