May 17, 2020

Research reveals SMEs are realising the benefits of procurement

Logistics
Supply Chain
Procurement
Jonathan Dyble
2 min
Small to medium-sized enterprises (SMES) are benefitting from procurement similarly to large organisations in the way of reducing costs, controlling spe...

Small to medium-sized enterprises (SMES) are benefitting from procurement similarly to large organisations in the way of reducing costs, controlling spending, and maximising the efficiency of labour, according to new research.

The eProcurement provider Wax Digital questioned 260 senior managers working for UK businesses with a turnover of £50mn to £250mn.

With the survey having gauged the thoughts on when procurement should be introduced into organisations, the results came back as follows:

-          77% claim to need procurement by the time it has 100 supplier contracts.

-          75% said procurement was needed once a company reaches a £50M turnover.

-          72% said once 500 invoices per month are being processed, procurement was necessary.

The survey revealed that procurement had been administered as a proactive measure by 31% questioned, with 48% implementing it as a reactionary measure to poor performance, demonstrating that many businesses have not recognised the tipping point at which they should introduce procurement.

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Of the 82% of those surveyed that had experience of introducing procurement into their firms, the majority revealed that doing so was a significant priority for them prior to implementation.

In response to the research, Wax Digital’s Managing Director Paul Ellis stated that proactive measures in introducing procurement are more desirable, but in any case, SMEs are recognising the benefits that procurement can bring.

“In spite of the barriers to adoption experienced by some of our research respondents, none of these challenges are unsurmountable, and forwarding thinking organisations will recognise their tipping points and put in place the necessary procedures to prevent a negative situation happening in the first place.”

“No two businesses are the same and each will have its own procurement tipping point.
 
“The research shows that UK businesses are realising that formal procurement isn’t just for large organisations, and that any business that wants to control spend, improve its supplier performance and eradicate slow admin-heavy processes from the business can benefit from the adoption of a more professional approach to procurement.”

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Jun 16, 2021

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

supplychain
Boeing
Airbus
tariffs
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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