New Imposed Tariffs and How They May Impact Your Supply Chain in 2018 and Beyond

With the imposition of trade tariffs by the US government last month, procurement professionals are being hit with a contingency that no one could have overseen.  

With retaliatory measures already emanating from China, economic pain is on its way for meat production, steel and 126 other US products, amounting to $3 billion of exports.

That’s a sizable hit.

But in an escalating war of words and tariffs, the US has responded with subsequent measures to be imposed specifically on Chinese products, implicating $50 billion worth of the country’s exports.

With the world now on the brink of a trade war between two of its most powerful nations, lobbyists all over the USA are propelling themselves toward Washington, DC at warp speed, hoping to derail a policy which has provoked these conditions.  But backchanneling between the two nations is also underway, according to US Treasury Secretary, Steve Mnuchin.

Caught in the crossfire are global supply chains.

We all lose

In this display of international muscle-flexing, it’s hoped that the quiet diplomacy mentioned in the media by Secretary Mnuchin will temper the worst excesses of both sides.  But what if that’s not the case? What if we’re plunged into a global trade war? What if the next move on the part of the US government is to restrict Chinese investment?

That would cost supply chains a great deal.  When investment dollars cease to flow, manufacturing concerns are forced to move operations like distribution centers and even factories, representing a major supply chain disruption.

China’s investment plans include promoting its technology sector, something the USA is attempting to disrupt.  This further exacerbates tensions between the two countries, as growth in this sector is crucial to Chinese economic growth.

There is even the threat of the US pulling out of the World Trade Organization, which would mean further de-stabilization, should neither nation blink.

Protect yourself with a GPO

Unforeseen contingencies are a supply chain’s worst nightmare.  So how do companies like yours protect yourself from the contingency represented by an escalating trade war between two intransigent powers?

A Group Purchasing Organization is the solution.  Regardless of what happens next with tariffs and the looming threat of inhibiting the ability of the Chinese to invest in the USA, a GPO offers its members pricing stability which will see them through the worst potential damage of all possible scenarios.

Because a GPO offers sustainable savings, protecting your company from unforeseen price increases for the long term, members are spared from the impact of tariffs and the fallout which is inevitable when investment is inhibited.

CenterPoint Group

CenterPoint is a trusted procurement advisor leveraging $850 of collective, indirect spend.  As a GPO, we’re able to return material savings to our members, as their funds form the basis for them to act collectively, receiving best in class terms and conditions and pricing stability.

We’re living in uncertain economic times, with tensions rising between the USA and China.  Protect your company with the power of numbers. Contact us.

The post New Imposed Tariffs and How They May Impact Your Supply Chain in 2018 and Beyond appeared first on Centerpoint.

source https://centerpointgroup.com/new-imposed-tariffs-and-how-they-may-impact-your-supply-chain-in-2018-and-beyond/

How Consolidating Your Spend Can Help Streamline Your Purchasing Habits

When your business has physical plants in multiple locations, it’s sometimes difficult to get a handle on purchasing.  You may have overarching policies and procedures in place, but who’s minding the store?

When remote locations’ budgets creep up past what’s projected, it shouldn’t come as a surprise if your purchasing practices vary. Without consolidation, monitoring and tracking, things can get out of hand and that’s not good business.

Centralization creates opportunities

Centralized, consolidated purchasing doesn’t just keep a lid on your budget.  It creates opportunities. When you choose a consolidated approach, human resources to manage the function aren’t expended in every location, for one.

Consolidating reduces the number of hands on the function, freeing human resources to be deployed elsewhere and increasing the likelihood of those policies and procedures we mentioned earlier being adhered to.

Often, multi-location companies have expanded rapidly, leading to ad hoc purchasing solutions.  This often means that services in procurement are unnecessarily duplicated and may be subjected to competing managerial philosophies about how to do it.  This is often the case when expansion has been provoked by mergers and acquisitions.

The opportunities happen when disparate purchasing functions are centralized, reducing the need for duplication of function and reducing the amount of time employees need to spend working off the side of their desks to get the job done.

A key opportunity is to develop the quality relationships you need with suppliers to get the consistency, reliability and savings you’re hoping for in the procurement space.

The answer is CenterPoint

If you’re struggling with purchasing practices across a variety of locations, then it’s clear that you need to centralize the function and consolidate it into a single, efficient function that gets your company what you need at the pricing you seek.

At CenterPoint Group, that’s what we do.  We’re a trusted procurement advisor, leveraging $850 million of collective, indirect spend to bring your customers the power of numbers.

When your purchasing is in the hands of the professionals at CenterPoint, you’re getting the pricing and stability you need to adhere to budgetary demands.  There’s no question about conformity of purpose because we’re procurement professionals who bring you cost savings on everyday office purchases.

Better together

CenterPoint’s customers know that we’re better together.  When resources are pooled, they’re able to reach beyond what’s normally possible.  You get the purchasing power of a giant, when you rely on the power of numbers and the procurement expertise of our team.

We’re able to offer our customers as much as 35% savings, with an ROI which can exceed 500%.

That’s effective purchasing.

In under two weeks, we can offer your company immediate savings.  With CenterPoint, those savings are sustainable. You get multi-year protection to support your budgeting with indexed pricing and caps.

CenterPoint Group

Now that we’ve revealed how consolidating your spend can help streamline your purchasing habits, it’s time to think about joining us to benefit from the undeniable power of numbers.

Contact us.  Streamline and consolidate your purchasing with strategic expertise.

The post How Consolidating Your Spend Can Help Streamline Your Purchasing Habits appeared first on Centerpoint.

source https://centerpointgroup.com/how-consolidating-your-spend-can-help-streamline-your-purchasing-habits/

Understanding the benefits of an effective Procure-to-Pay and Category Management Process

Procurement professionals are served by understanding the benefits of an effective procure-to-pay and category management process, as these are two of the building blocks of effective procurement, as it relates to operational finance.

Let’s start by defining our terms.

Procure-to-pay

An effective procure-to-pay system provides organizations with full transparency throughout the procurement life cycle.  Insight is 360-degree with P2P, allowing for visibility and control of financial obligations and cash flow.

The promise of P2P is to eliminate the considerable paperwork associated with the financial aspects of procurement at the accounts payable level and reduce the inefficiencies commonly associated with this function.

Category management

Originating in the retail space, category management is the practice of grouping products in categories, including related products.

This allows procurement to “bundle” purchase items, eliminating the need for separate contracts with vendors and consolidating these under one central agreement.  Once this has been achieved, procurement can access material savings for purchases.

This practice creates economies of scale, which allow for volume discounts.

Best practices for procurement

By implementing PSP and category management, procurement creates a less cumbersome process which is centralized and eliminates bottlenecks at the AP level.  PRP, when married to category management creates a smoother purchasing environment which ultimately results on savings on required purchases.

P2P, by nature, usually works from its own categories.  Instead of creating individual processes per supplier, P2P applies one process to all vendors, creating a model which is clearly defined as the overarching purchasing methodology.

When P2P is effectively synergized with category management, the result is that opportunities present themselves more readily.  These opportunities are in the realm of product consolidation.

By reducing required processes and standardizing them into one simplified process, paperwork and inefficiencies are reduced.  Adding category management readily lends itself to P2P, creating further opportunities for savings based on volume buys.

These are clearly best practices which benefit procurement in terms of enhanced efficiency, seamless processing of purchases and reduced costs.

Implementation

Effective implementation of P2P and category management is dependent on a strategy to manage change in your specific environment.  Understanding the nature of the environment you’re attempting to change is key.

Is it a traditional environment, set in its ways, or is it a vital, “living tree” environment, ripe and ready for whatever change comes its way?

Changing hearts and minds to embrace new ways of doing things is largely dependent on your knowledge of the people and departments involved and their disposition in confrontation of systemic changes like this.

CenterPoint Group can help

CenterPoint Group is more than a trusted procurement advisor.  We offer companies like yours the added value of expert consultation, reporting and data analysis to ensure you’re getting the most from your spend for everyday business needs.

Because we leverage $850 million of indirect, collective spend, your membership enjoys the heft provided by the power of numbers.

Our procurement practices are informed by 15 years of market data and experience, which have served 20% of the Fortune 500 over the past decade.

Contact us.

The post Understanding the benefits of an effective Procure-to-Pay and Category Management Process appeared first on Centerpoint.

source https://centerpointgroup.com/understanding-the-benefits-of-an-effective-procure-to-pay-and-category-management-process/

The Role of Supply Management in Mergers and Acquisitions

The whole point of mergers and acquisitions is to improve market standing and thus, earnings.  An acquisition not only knocks a competitor out of the running, that competitor’s resources and systems are added to your company arsenal.

But the single most important factor in a successful merger is how the supply chain is handled as part of the transition.  Because the bottom line is the focus and because it’s not realistic to expect a higher profit margin immediately following a merger or acquisition, then you’re looking to rein in spending.

While many companies look for savings in consolidating human resources functions as part of a merger, it’s well-advised to look at your supply chain and procurement practices, to see how these can support the project of reducing costs while waiting for revenue to increase.

Both parties to the merger or acquisition should be prepared to instigate change in the way they approach procurement and maintain or improve the management of their supply chains.

Supporting your transition

Whether you’re the absorber or the absorbed, your transition becomes smoother when you call on a trusted procurement advisor like CenterPoint Group.

We’re there to ensure that your transition to the new reality is supported by expertise which ensures the integrity of the supply chain on both sides of the merger or acquisition.  We identify vendors from both data sets which should be retained and those you may wish to offload.

We facilitate supply chain integration that makes sense, providing you with best in class terms and conditions and agreements which ensure you’re getting the best deal possible as you establish the new corporate reality.

Continuity and expertise

Continuity is key to a successful merger, especially when your customers want to know where their orders stand and your vendors want to know where they link up in the new shape of your organization.

With possible disruptions on the human resources level, CenterPoint Group is an outsourced solution that keeps the ball rolling, avoiding the possibility of damaged relationships all along the supply chain.

Beyond pricing

While CenterPoint’s procurement expertise brings you the best possible pricing on your everyday business needs, we don’t stop there.  We ensure you’re getting the most you can from your suppliers with advanced data analysis and over a decade of procurement expertise.

Every aspect your supply chain is analyzed, with a proprietary database which enables us to harvest every piece of fruit on offer and not just the low-hanging variety.

With hands-on account management, we mediate disputes with suppliers in the event of a deviation from agreed upon terms.  That sets you free to find the way forward with the new institutional landscape you’ve created, adding value.

We’re a consulting force that helps you navigate profound organizational change with expert procurement support.  You won’t skip a beat with CenterPoint’s data-driven procurement practices supporting you along the way.

CenterPoint Group looks after the nuts and bolts, while you look after the big picture.  We’re trusted procurement advisors who support the success of mergers and acquisitions. Contact us.

The post The Role of Supply Management in Mergers and Acquisitions appeared first on Centerpoint.

source https://centerpointgroup.com/the-role-of-supply-management-in-mergers-and-acquisitions/