Will You Compete at the Next Level?

Procurement excellence requires mastery of operating within a new global context

Barry Hochfelder
Barry Hochfelder

The World Economic Forum kicked off 2015 with its Annual Meeting convening under the strategic theme of “The New Global Context.” It said, “We live in a fast-paced and interconnected world, where breakthrough technologies, demographic shifts and political transformations have far-reaching societal and economic consequences. More than ever, leaders need to share insights and innovations on how best to navigate the future.”

To me, this vividly depicts the challenges and opportunities confronting our readers’ organizations and the increasing role that procurement plays in determining their company’s success.
Most procurement organizations have a seat in the C-suite and drive strategic imperatives in areas such as innovation, quality or sustainability. The challenge for many is that they know where they want to go, but can’t get there—largely due to talent shortages, a predisposition towards tactical procurement and difficulty navigating external influences on their business.

According to global information and analytics firm, IHS, the next generation of performance will come from continuous improvement, knowledge sharing and better use of information. In order to benchmark, compete and operate more effectively in this next generation, procurement must understand the context of the company, its operations and its supply chain in relation to interconnected global markets and other external influences.

To give us a better understanding of what to expect, we asked IHS to contribute to this Special Edition and examine some of the global issues affecting procurement in 2015.
On Page 7, we begin a comprehensive annual preview of key global commodities in the 2015 Material Buyer’s Guide. Recognized industry experts break down the key issues, risks and buying opportunities for everything from steel and chemicals to skilled labor and agriculture. Arm yourself with insight to avoid pitfalls and capitalize on opportunities.

Speaking of agriculture, did you ever wonder how weather variability and changing climates impact crops around the world? Find out on Page 15. Everyone from financial lenders and equipment manufacturers to chemical producers of fertilizer will have something to gain from new studies modeling the future impact of weather on global crops.

Asia continues to be a hot topic. On Page 14, we discuss whether an emerging Asia hit stumbling blocks in its labor market. On Page 16, we observe trends and shifts in sourcing strategies, as we reveal findings of our annual outsourcing and risk study. We examine regional hotspots around the world according to your peers, as well as their thoughts on increasing risk in the supply chain.
Energy is increasingly important. On Page 18, we discuss the changing face of energy in the United States, and what changes in the coal and unconventional energy segments mean to domestic rail transport that may impact your company or its transportation costs.

So, it’s not your imagination—global pace, complexity and competition are all accelerating around you and your organization. To navigate this new global context and compete at higher levels, most companies are focusing on procurement excellence as part of a broader pursuit of operational excellence. In fact, IHS research shows that more than 70 percent of organizations have operational excellence goals and objectives driving supply chain and procurement initiatives right now.

Thus, we have begun a new chapter in procurement’s history, which requires knowledge and mastery of the new global context in which organizations operate within.
How well will you compete at the next level?