“The only constant is change”
Greek Philosopher Diogenes Laertius (3rd Century AD) was the first to coin the phrase although he took the concept from Heraclitus’ Doctrine, penned a few hundred years earlier. Amazing how it stands true today.
As we turn the corner and head for the home stretch of 2008, it wise to start thinking of the dynamics to which we’ll be required to respond in 2009.
Greek Philosopher Diogenes Laertius (3rd Century AD) was the first to coin the phrase although he took the concept from Heraclitus’ Doctrine, penned a few hundred years earlier. Amazing how it stands true today.
As we turn the corner and head for the home stretch of 2008, it wise to start thinking of the dynamics to which we’ll be required to respond in 2009.
- Rapid re-integration and de-integration of foreign suppliers
The recent and rapid descent of oil prices is no guarantee that overseas supply will remain competitive. Additionally, bank restrictions are leaving foreign suppliers unable to get foreign currency to pay for materials or freight. It’s important that organizations establish methods to or remain agile in moving from foreign to domestic suppliers and back again. - Interruption in Supply
Factors such as political instability, slow or negative economic growth and banking dynamics all mean that suppliers may slow or suspend production. It has never more important to be tuned in to your suppliers’ production plans than it will be 2009. - Supplier failures
Businesses are failing, which unfortunately will lead to more business failures. It’s sensible to ensure that every requirement has at least a short list of qualified and capable suppliers. - Reduced overseas competition for goods
Both the Euro zone and China are reporting recessions/slower growth. This means that some of the foreign competition for domestic goods will abate. That may lead to greater domestic supply and price advantages for market savvy buyers. - Frequency/Acceptance of reverse auctions will increase
Procurement staffs will be pressured to cut costs as deeply as ever, and reverse auctions are an effective, quick turn method. Businesses and markets that once turned away from reverse auctions will accept them as necessary to compete for sales. - Business cases for major purchase decisions?
The days of line-item, big ticket procurement may soon be a thing of the past. The Federal Office of Management and Budget is already requiring full business case presentations for major technology procurement. It only makes sense that the private sector businesses are embracing the same approach or will be soon to follow. - Shorter product lifecycles = new sourcing cycles
Sellers continue to upgrade to create competitive advantage, shrinking product lifecycles. This is most present in technology and electronics, but product life cycles are shrinking everywhere. The result, we must re-examine the depth, breadth and frequency of sourcing cycles to optimize value for the dollar. - Increased procurement outsourcing
The need to execute more robust and more frequent sourcing events will continue to drive (already thin) procurement teams to take on outsourced tools and manpower simply to remain current with day to day work. - Give a hoot, save a buck
New Recycling programs present opportunities to recover costs. Wal-Mart (Canada) has already partnered with Grace (Canada) to recover and recycle Styrofoam. To that same end, Poly-Pak (US) is embarking on a Grocery Bag recovery program. - Procurement staffing will continue to decrease.
Simplyhired.com reports that procurement jobs have decreased by 8% since May 2007. With more business contraction yet to come, there has never been a better time for those left standing
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