18 October 2001 | Robin Parker
Buyers dealing with suppliers in emerging markets should be prepared to manage the risks for them, the chief procurement officer at bottling company Coca-Cola HBC told delegates at the CIPS conference.
David Cowell said that it was often difficult to find out whether a supplier in an emerging market such as Armenia or Ukraine was even solvent. He suggested buyers accept that determining potential suppliers are low risk is much more important than their competitiveness.
Cowell added that measures to ensure suppliers did not accept all of the risk, such as offering to take ownership in part of the process or sharing the financial exposure, should help to ensure a more secure supply chain.
He said that currency remains the most significant factor in global risk management. "International buyers face hyperinflation and constantly changing interest rates, which influence the choice between local and global purchasing decisions."
Cowell also warned delegates to consider special trade agreements between different countries, restrictions on physical movement in certain regions, and market instability.
Coca-Cola HBC is the largest bottler in Europe, and operates in established and emerging markets. It will increase its international network of bases from 23 countries to 26 by the end of this year, Cowell said.