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10 October 2013 | Gurjit Degun
Procurement professionals must be prepared for increasing levels of demand in the supply chain as the economy begins to recover.
That’s the warning from CIPS group CEO David Noble who explained that the there has never been an important time for the industry to make an impact.
Speaking at the annual CIPS conference in London today Noble predicted a “horrendous shortage of supply” as the economy comes out of the recession.
“I think one of the certainties we start to see as we come out of this horrendous recession is, in my experience, a horrendous shortage of supply,” he said.
“The old days of allocation are likely to return with a vengeance because world inventory levels are at a record low. There’s never been a lower time for inventories, maybe because companies have held back on capital investments, and maybe because they didn’t want to risk it.
“What we are going to see as demand starts to pick up is horrendous shortages in many areas. As we go through this continuous cycle, the profession comes under greater strain and I think if we recognise these coming at us in advance it’s far better than to have the chief executive on your back saying, ‘why didn’t you know this was coming?’
“There’s never been a time where’s it’s been important for this profession to make an impact, and the institute has got a huge role to play for you.”
Paula Gildert, whose CIPS presidency is drawing to a close, also spoke at the event. She advised procurement leaders to make sure they know what their suppliers are doing.
Her comments follow a BBC Panorama investigation which found that suppliers in India and Bangladesh were locking employees in factories to make them work longer hours.
“If you don’t know what your tertiary suppliers are doing, you are bearing a big risk. Is it mitigated? Do you know who’s doing what, and where? Are your audits good enough?
“Are you aware of what your suppliers are doing? You are responsible as leaders of this function for your business’ reputation. This is a big responsibility.”