Procurement During Trade Wars

Competitive advantage in times of trouble

We are entering times of trouble. More than ever before, a key success factor for procurement organizations will be building up competences and capabilities – supported by comprehensive analytical methods – to analyze options faster and better than their competition.

Doing a network modeling exercise every few years is no longer enough. Neither is risk management by virtue of having a “plan B” in the drawer that is neither integrated into the overall footprint nor frequently updated.

Best-practice companies use integrated optimization methods to run comprehensive scenario analysis the moment something happens in the market, giving them a huge competitive advantage. They suffer less and can more rapidly secure access to the best suppliers as market conditions change.

In times like these, many procurement organizations will painfully recognize having not spent enough time and energy in recent years on advanced risk management and analytics

The world is once again facing a challenging, dangerous time for the economy. The US on one side and both China and the EU on the other seem to be steering full steam ahead into a serious trade war. This article does not focus on who is "right" or "wrong". And while we surely could have an enthralling discussion about it, neither do we want to discuss the actors, their arguments, or timing from a game theory perspective. Instead, let’s look directly at the implications for procurement in such uncertain times. Less from a "you need to move your suppliers from country X and find new suppliers in country Y" and more from a strategy and capability-oriented perspective.

Procurement During Trade Wars

Competitive Advantage In Times Of Trouble