Ed Winterschladen

15 February 2021
Topics in this article
  • Agility
  • Cost Optimization
  • Strategy & Planning

Observations from European Vice President – Edward Winterschladen

It would be a vast understatement to say that 2021 has been challenging so far for British business. The national lockdown and Brexit have been a double whammy for many. That said, it has also shown the incredible resilience of our country’s companies that they have been able to adjust the ways they operate in such difficult circumstances.

It appears that there is light appearing at the end of the tunnel. The UK’s vaccination programme is performing well and it looks like the spring will see an easing of restrictions, allowing a significant re-opening of the economy.

This will create a summer of opportunity. This is not a demand-side recession, so it should be far easier to emerge from. But how can business leaders, procurement teams and finance professionals put themselves in the strongest position to capitalise on this post pandemic? There are three areas I think they should be focused on.

Strengthening supply chains

The last year has demonstrated the importance of resilient supply chains. Many businesses have seen their supply chains shaken – first by COVID-19 and then in some cases again by Brexit. By and large supply chains have stood up well, bending without breaking.

Among the CFOs and CPOs I speak to there is now a feeling a resilient supply chain is a proposition worth investing in. It may cost a premium, but the benefits in these uncertain times outweigh the costs.

Those that have strong supply chains will be well positioned to make the most of 2021’s opportunities, especially if the return to normality isn’t a smooth path. Talk to our procurement consultants to understand how you can strengthen your supply chains post pandemic.

Acting agile and supply chain management

We don’t know when lockdown will lift in the UK fully and we don’t know what it will look when it does. Will it be big bang where everything re-opens in one go or will it be a slower, phased re-opening? We don’t even know how much notice we will get. It could be days or it could be over a month.

This uncertainty makes it difficult to plan for re-opening. The key will be being able to react in an agile manner so that for businesses who have had to close, once the scramble to re-open begins you are already in a strong position to execute.

Procurement teams will need to work incredibly close with suppliers to keep plans on track and ensure suppliers are treated well in these challenging times. You’ll find that suppliers who you have treated well will be far more likely to go above and beyond to deliver for you.

Controlling costs and cost optimization

If you are a business exporting to the European Union you’ll have seen costs rise. Investing in supply chain resilience also costs money. As does building and maintaining the systems to facilitate remote and hybrid working.

As these unavoidable costs rise it will be ever more important for finance and procurement professionals to identify areas where costs can be optimised. Luckily, with FTSE 250 companies spending on average 70% of their outgoings on suppliers, there is plenty of room for manoeuvre in most business. As a leading procurement consultancy, we have provided an insightful report into the expenses of global businesses in partnership with CEBR to help you understand how you compare.

That’s not to say it’s an easy task. At Proxima, our procurement consultants have found we can typically reduce costs by between 7% and 15% but this does require a strong understanding of the categories where you spend money as well as real strategic focus.

Brighter days are almost certainly ahead for the British economy. By strengthening supply chains, acting agile and implementing cost optimization you’ll be creating the perfect environment to help your business thrive. Make sure your business can seize the post-pandemic opportunity.

About Proxima

As a procurement consultancy, we are often inspired and defined by who we work with. We provide expert procurement services to world leading brands in the UK, US and around the world.

For more information on how our procurement consultants can help you prepare, reduce your spend, increase your cost savings, and optimize your procurement strategy post pandemic – simply get in touch.

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