Massive competition to hit all firms

6 January 2000
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06 January 2000 | David Arminas

Fierce competition "never witnessed before" will be the one threat common to all businesses in the next 10 years, according to a Partnership Sourcing Limited (PSL) study.

Sparked by globalisation, the trend is already seeing procurement professionals moving from a purchase to a project way of working, says Vision 2010, which examines factors affecting supply chains over the next decade.

The study states that, as the need for best value increases, procurement will become more involved in company strategy, with an emphasis on supply chain development rather than just lowest-cost purchase and supply methods. E-commerce will be the so-called oil to keep the wheel of supply chain management turning, leveraging intangible assets across the global supply chain.

It says that, as resources are shared among interdependent companies in a supply chain, a "value chain" will develop, replacing the lean supply chain concept, which has over-emphasised cost reduction. This development means, it says, that negotiations within supply chains will become more complex and procurement professionals must rise to the task.

"Whether it is surfing the Internet, setting up a website or using e-commerce, everybody is now involved in global opportunities," said Les Pyle, chairman of the expert group for the study and group purchasing director of ICL. "Globalisation is a two-sided coin of opportunity and threat. Global players are coming here and taking over our turf," he said.

Pyle believes the value chain is the key to meeting a global challenge, but it requires senior procurement staff to be open-minded. "When ICL first started doing business in Taiwan, I sought out a company that had been working there to see what I could learn about the way they thought," he said.

Successful companies will understand these cultural and business-oriented differences, he added.

PSL is a non-profit organisation, set up 10 years ago by the Department of Trade and Industry and the Confederation of British Industry, to offer advice on partnering. Vision 2010 will be available at the end of this month on the PSL website, www.pslcbi.com.

SMjan2000

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