Enough opinions are shared. Therefore, the following thoughts are not of a political nature. Let’s get down to business and see if this has already possible effects on today’s supply chains & sourcing activities. But also, let’s learn from the past and consider previous decisions made during the first term in office as they still impact us today.

CNBC provided an excellent summary on November 6th:

Retailers & manufacturing companies have been increasingly calling logistics partners, both in the days leading up to the presidential election and on Election Night, about front-loading shipments ahead of any changes in tariff policy to be pursued by President-elect Trump, who campaigned on an aggressive expansion of existing U.S. tariffs on cross-border trade

There will be a surge in import demand for containerized goods as U.S. companies stock up ahead of new tariffs. Especially related to goods that are not time-sensitive and will create upward pressure on freight rates in the coming months

Front-loading of shipping contributed to the 70% inflation in freight rates, according to data from 2018. Potential tariffs provide cost risk on global supply chains

Proposed tariffs would cause companies to delay further their investment in Mexico and uncertainty around USMCA renegotiation in 2026, potentially impacting trading

My observation: Overall, we see great similarities to the past. Trump’s policies notably impacted global supply chains, reshaping trade flows, manufacturing trends, and sourcing strategies. Here are some key ways his policies influenced (and probably will in the future) supply chains:

Trade Wars & Tariffs. Trump initiated a trade war with China, imposing tariffs on billions of dollars of Chinese goods -> Diversification of Sourcing to countries in Southeast Asia

Renegotiation of Trade Deals. Trump renegotiated NAFTA into the US-Mexico-Canada Agreement (USMCA), impacting North American supply chains -> This influenced U.S. companies to source more materials domestically or from Canada and Mexico.

Push for Domestic Manufacturing. Trump’s administration promoted an „America First“ approach-> Pressure on companies to invest in U.S. production facilities

Impact on Technology and Semiconductor Supply Chains. Trump’s administration placed restrictions on Chinese tech giants like Huawei, impacting the semiconductor supply chain -> Push for Domestic Semiconductor Production

Trump’s earlier policies set the stage for a trend toward „de-globalization,“ with companies increasingly evaluating supply chain resilience, diversity, and national security in their sourcing decisions. While Biden has taken a different approach, some of Trump’s policies, especially on China, remain influential, as supply chain resilience and domestic production remain priorities in U.S. policy.

Summary: Uncertainty and political decisions will keep us Supply Chain people busy. Your thoughts?

The post US Election Results Already Impact Supply Chains & Sourcing appeared first on targetP.

Some of you may have followed my recent postings on inflation. Over the past few weeks, I have analyzed the development of inflation in Germany and the USA and presented current opportunities to reduce procurement costs.

Today, let’s talk about the UK.

I won’t go that deep into the analysis but let’s look at the famous Pint Index (the “British version” of the Big Mac Index..just kidding).

The development is scary. Peter explained it well and this also impacts many other areas!

Cheers and a happy weekend. Watch out for the weekly Saturday Supply Chain Madness posting on LinkedIn.

Source: Thanks to James Meads (on LinkedIn) for the inspiration and Peter Donaghy (on X) for the graphic and idea

The post UK Pint Inflation – Deep Dive analysis unveils a scary development appeared first on targetP.

The August Purchasing Managers Index (PMI) i.e. shows a promising trend for Procurement pros: “The average prices charged for goods and services increased globally in July at the joint-slowest rate since October 2020″.

Cost-efficient Procurement ensures financial stability and enables investment in innovation and growth amid economic uncertainty. Thus, reducing costs is critical for enhancing an organization’s profitability and operational efficiency. In 2024, cost management has become a top priority for many Procurement teams as it is even more crucial due to rising inflation, global supply chain disruptions, weak economies, and increased competition.

After years of 10%+ increases, it is time to fight back, if you haven’t started yet.

No take it or leave it anymore. It is time to act and end the era of no pushback.

What to do;

Renegotiate contracts to secure lower prices, adjust inventory, explore long-term agreements

Reassess supplier pricing strategies, pass savings to product pricing, and invest in innovation or value-added services.

Collaborate with suppliers to optimize cost structures, ensuring mutual benefits.

Monitor market trends closely to ensure timely responses, maintaining a competitive edge

Selected value levers:

Skills & Human Power: Invest in skills (Negotiation & Cost Management training)

Supplier Consolidation (but understand the supply risk that comes with it)

Demand Management (Involve stakeholders)

Establish a Supplier Negotiation program to achieve better terms

Cost Structure Analysis: Identify opportunities for cost reduction

Strategic Sourcing: Improve your strategic sourcing. Select suppliers that offer the best value rather than just the lowest price.

Category Management: Manage Categories as strategic business units, and efficiency

Risk & Compliance Management: Avoid unplanned costs from unstable supply chains, missing risk monitoring, and not adhering to regulatory

Procurement must play a pivotal role in driving cost reductions across the organization. The combination of supplier consolidation, demand management, strategic sourcing, risk & compliance management, and continuous skill development creates a comprehensive approach to cost management.

targetP evolving procurement

The post Procurement Teams: It’s time to fight back and reduce costs appeared first on targetP.