Tariffs again...

 Well, the transatlantic tariffs situation is still not clear.  At the time of writing it seems that there will be a 50% tariff imposed on EU goods by the USA from 1 July.  But this deadline has already been postponed once, and maybe again.  And the size of the tariff may change.  And then again, the courts have decided that the current tariffs should are not permissible in law and if the US government wishes to apply then it has to be done by Congress, and not by the Executive claiming (rather ridiculously*) an economic emergency.

I do not pretend to know what is going to happen, but as Procurement and Supply Chain professionals we should take this chance to shine within our own organisations.  This period of high volatility will create both challenges and opportunities.

We need to be constantly reviewing the situation and developing (then implementing) appropriate plans.

Obviously we have to consider what it will mean if there are tariffs or reciprocal tariffs in our supply chains.  We need to check what these are (or might be) and then consider our supplier's approach is going to be.  Some will take this as an opportunity to raise prices to the full extent of tariff rate (even if there is a draw back arrangement, or if tariffs only apply to half of the product...).  Others (dare I say more sensible) will see this as an opportunity to have more dialogue with their customers ("we don't know any more than you do, but we have to work together...").

But don't forget the opportunities that might arise from displacement effects - Chinese and EU goods unable to win market space in the USA because of high tariffs will look to find other customers.  This might lead to price reductions as they seek to gain space in currently well served markets.

Whether we want to take advantage of that (risking existing relationships for a possibly temporary advantage) is of course the sort of thing we ought to be discussing internally and developing appropriate strategies.

Good luck

* The Global Financial Crisis of 2008/9 and Covid-19 in 2020 were obvious economic emergencies.  The USA in 2025 was the fastest growing major economy, had actually caught up the growth trend line from before Covid, had 4% unemployment (technically full employment) and 2.5% inflation (just 0.5% above target) - Clearly not an emergency, though of course governments are free to adopt whatever policies they wish following due process.

Always look on the bright side of tariffs - part one

 WELL, we are still in uncertain times.  Tariffs are being introduced, reduced, raised, paused, exempted on what feels like a daily basis.

So, from a Procurement & Supply Chain point of view let's take the positives - our role in the organisation is (currently) critical to success  - maybe even to survival.  So, for once in our lives we are on the main stage (or at the very least, we should be - it may not be happening for you).

And because of the complex nature of some of these tariffs (see below) it is vitally important that we understand the origins and structure of our supply chains.  So, we should be supported in those investigations rather than being told just to get a shipment for Tuesday...

Being less flippant and exaggerated, it is a good reminder of the Covid-19 lesson that unless we really understand our supply chains we are not aware of the risks and opportunities within it.

Good hunting.

Supply Chain disruption

 Brilliant article in the FT about the supply chain disruptions in the ICT chip manufacturing process.

Sadly, with no easy answers - apart from national (or even regional) self-reliance is not going to work.

Which many politicians will not want to hear (in many countries).

Quite a few business leaders seem very reluctant to hear that things are (necessarily) complicated and will remain so.  In particular in my old stomping ground (the chemicals industry) people find it difficult to process that the usual economic rules do not always apply.  Just because something is profitable and in demand does not mean that competitors will come into the market.  If a profitable product ceases production (e.g. as a result of an industrial incident) it does not follow that other businesses will make it (or that the original manufacturer will build a replacement plant).  There are complexities about risk, availability, production processes, regulations etc. that all need to be understood.  But if you are a customer you are likely to think "well why aren't they doing it?".

Good procurement personnel need to know and understand these complexities (obviously not at granular detail) in order to fully understand the supply chain risks.

In the pre-covid and pre-Brexit times when things were working smoothly, Lean supply chains seemed to be the answer.  At the moment we are all considering Resilient supply chains.  But nothing is ever quite simple, and neither approach is simply good or bad.

Interesting times ahead

IChemE - Restarting Supply Chains - 5th August 2020

Whatever we think about the current pandemic  - whether concerns are overblown, whether it will be over soon, or whether it is serious and we are stuck with it for months - it is clear that there has been major disruption to supply chains.   We can hope that everything will very quickly get back to normal - but there is an element of wishful thinking there.

You might think that this is a great chance to restructure your supply chains - or that things will quickly revert to exactly what they were before.

With IChemE we are running an online seminar that helps to cover all of these topics, and will help you to think through your options and choices.  And we hope to cover the possible disruptions caused by the UK leaving the EU REACH regime a bit too.

As with any disruption, you can wish and hope - or you can plan and organise.  We hope to help you with your planning.

There is a guest speaker that we are not quite able to announce - watch this space.

Full details and booking arrangements are here.

New dates for summer online courses

Somehow these online courses seem to be more fluid than face to face courses - partly because we don't have to book a venue.  And partly because we are all still working it all out.

Anyway, new dates for online courses;

EuroMaTech - Restarting your International Supply Chains - 22/23 July 2020

EuroMaTech - Advanced Purchasing Management - 26/27 July 2020

Both courses to be run on Dubai time.  Details on www.euromatech.com