Inflation: Paradigm shift in procurement
Inflation: The world in black and gray
Ten percent has always been possible – anyone who started out in procurement learnt that in their first few weeks on the job. It has mostly been like this for the last 50 years. But with inflation starting last year, and currently ranging in the European Union and the United Kingdom from 6.5% (France) to 25.2% (Estonia), the old mantra of cost reduction by ten percent per year is no longer achievable. Procurement departments need new strategies.
According to Eurostat, producer prices rose by 37.8% across the EU in July. Analysis by the Cologne Institute for Economic Research found that 2022 will “far exceed the cost shocks of the mid-1970s, early 1980s and immediately before the global financial crisis” – even if the increase does not pick up speed from now on.
Detailed contents in the magazine issue:
- Shortages Arising from Conflicting Developments
- A Herculean Task for Buyers
- Old Measures of Success No Longer Apply
- Volatility Persists, Flexibility is Required
- Protect Yourself from Gray Rhinos!
- Conclusion & recommendations for action
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Authors
Daniel Weise
is CEO of INVERTO and Global Topic Leader Procurement with the Boston Consulting Group. In his books he deals with the question of how companies can develop their procurement into
being a driver for innovation, sustainability and efficiency.
Nathalie Krämer
is a Senior Project Manager at INVERTO in Cologne and mainly supports customers from industry. One of her focal points is the automotive industry, where she is responsible for cost and process optimization projects.