Procurement Focus: Deloitte – the global management consultant
The consultancy giant, Deloitte, allows clients to meet business goals by providing consulting, tax, audit, assurance and financial and risk advisory.
Founded in 1845 in London, Deloitte has experienced significant growth throughout the years and now serves more than 286,000 people in 150 countries. Deloitte works with the biggest companies worldwide and serves four out of five Fortune 500 companies.
However, Deloitte’s guidance has also been extended to procurement leaders worldwide through the Global Chief Procurement Officer Survey 2018 which offers an insight into the key themes facing procurement today. More than 500 procurement leaders from 39 different countries took part with an annual turnover reaching over $5.5trn. The survey portrayed a greater emphasis towards innovation while procurement continued to successfully demonstrate short-term savings and managing risk to enable growth.
Some of the key findings from the survey saw the top three business strategies for procurement leaders featuring cost reduction (78%), new products/market development (58%) and managing risks (54%). It was also found that 61% of procurement leaders provided better year-on-year savings performance than the previous year, and 73% of procurement leaders felt they have the backing of their respective organisations. With technology becoming an increasingly influential part of how businesses operate, 33% of procurement leaders believe that a key digital procurement strategy will allow for the successful completion of organisational objectives and value.
The importance of leading rather than following cannot be underestimated, particularly in the supply chain space. Deloitte found that supply chain leaders are more likely to:
Recognise the importance of innovation: It was revealed that 96% of those surveyed identified innovation as being “extremely important” to growth.
Be early adopters of disruptive technologies such as 3D printing: 48% of supply chain leaders are more likely to utilise additive manufacturing extensively.
Use analytics extensively: 75% of leaders utilise optimisation software in comparison to 34% of supply chain followers.
Empower executive level leadership: 56% of supply chain leaders operate with a senior executive on the frontline of its supply chain function, in comparison to 33% of followers.
Connect the organisation: Around 50% of supply chain leaders own the six links connected with supply chain management such as; product development, supply planning, demand planning, sourcing and procurement, as well as manufacturing and logistics and distribution.
Develop talent strategies: It was also found that 88% are more likely to recruit supply chain professionals with analytics expertise and cross-functional experience.
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.”