The power of a global community like Procurement Leaders is the direct access it provides to the thoughts, concerns and ideas of executives across every industry and region.
It’s an unparalleled barometer of the function and a global ecosystem from which clear signals can emerge amid the noise before they appear anywhere else. Sometimes our conversations provide therapy, at others they offer immediate decision support or spark strategic inspiration.
The beauty is that at any point in time, someone in the community will be dealing with something that others will soon be confronted by. After all, there’s no such thing as an original idea – or an original challenge.
A good example came last week, when we convened the CPO community in Australia and New Zealand to discuss the energy crisis that has embroiled the region since the start of the Gulf conflict.
The two countries are the only ones that fall short of the International Energy Authority’s mandate for net importers of oil to maintain 90 days of oil reserves, which has led to serious fuel supply crunches and huge price hikes over the past few weeks.
In a rare primetime television address to the nation in early April, Australian prime minister Anthony Albanese warned of difficult times ahead, and how the economic impact of the war will be with the country for months. He asked citizens to adapt their behaviour.
Similarly, on our call, CPOs described sharp increases in the price of fuel and petrochemicals. These are cascading into increased costs of transport, chemicals and critical construction, healthcare and mining inputs. At the same time, they have serious concerns about liquidity, supplier insolvency and the longer‑term economic effects.
As a consequence, they are adapting behaviours, with a shift to short-term price indexing (often monthly) to address supply liquidity issues while ensuring prices can also flex down when appropriate. Contract variations are also being rejected to prevent longer-term increases being baked in.
In the longer term, they are scenario planning over multiple time horizons and contemplating more foundational shifts to their supply chains.
So, while CPOs everywhere will be in crisis-management mode and rolling out strategies to help them get through the coming weeks and months, the acuteness of the situation in Australia and New Zealand means there are many lessons to be learned.
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