A new survey from The Economist Intelligence Unit sheds some informative light on the complex trade tensions and supply risks that practitioners occupying supply chain and procurement jobs currently face. 37% of respondents reported that they had developed new sourcing options due to the ominous trade tensions gathering momentum. 35% said that they anticipate increased procurement costs due to these tensions, while 29% expect them to result in significantly greater supply chain complexity.
Topping the list of trade worries amongst procurement practitioners, presumably including supply chain and procurement interims as well as those in permanent roles, were post-Brexit negotiations, cited by 23% of respondents. Next in the ‘worry league table’ was the impact of the looming US-China trade war, cited by 21%. The third most significant worry, cited by 13%, was the effect on procurement and supply chains of national trade barriers in the form of new censorship and privacy regulations. Finally, 12% cited extreme weather and climate change as their greatest concern.
While all the procurement pros expect many of these headwinds to come their way, they also see themselves as the agents holding the greatest responsibility for devising solutions. 71% believe that collaboration with finance colleagues will play a crucial part in responding effectively to current trade predicaments. Commenting on the emerging barriers to digital trade posed by national regulations on privacy and censorship, Nicolas Roux, Chief Procurement Officer at SITA, said: “The regulations and constraints around data processing have material impacts, from solution design to vendor selection, and can even limit the ability to implement large-scale automation.”Procurement practitioners are reviewing internal company controls and procedures to manage the uncertainty surrounding trade, as well as forecasting price changes via simulations and searching for new suppliers. The study shows that those who had expanded their sourcing options tended to show the most confidence in their ability to manage the trade chaos that appears to be emerging.