Supply chain
The impact of new Procurement Directives Early this year, the European Commission is expected to unveil the biggest raft of change in almost a decade to Utilities and Public Sector Procurement Directives. This could be a double-edged sword; providing real opportunities for suppliers including SME’s, but significant potential risk for buyers who are unprepared and could be challenged on procurement decisions.
slavery from their supply chains. The Home Office has published a draft version of the law and expects to publish a final version and an action plan in the Spring. Both examples show that more than
ever, CSR, health and safety, ethics, bribery, corruption, compliance and financial well-being are now critical aspects of business activity which need to be monitored and reported on very closely. We predict that increasingly, buyers will be looking for systems to accurately record and benchmark suppliers’ performance in terms of sustainability.
The changes are expected to include: • buyers will no longer be able to impose a minimum financial turnover requirement on suppliers greater than two times the value of the contract.
• SME’s tendering for ‘above threshold’ contracts will now only be required to provide evidence of compliance when the contract is awarded.
• clearer definition of what constitutes a ‘substantial’ or ‘material’ change to contract.
The Cabinet Office is expected to enter the changes into legislation swiftly, within 12 – 18 months. As such, we would recommend buyers and suppliers get ahead of the game and act early before the changes become law. This includes
checking procedures and contracts are watertight and in line with expected legislative requirements.
Creating a single global view of supplier data
The World Trade Organisation predicts world trade growth of 4.5 per cent in 2014. We anticipate big businesses will have a renewed focus on expanding into emerging markets. It will become a priority for global businesses to implement the same high standards in terms of health and safety, ethics and compliance in all countries in which they operate.
In 2014 we expect to see a growing number of companies consolidating their supplier information into a centrally managed database which allows businesses to source either globally or on a country-by-country basis depending on political and economic factors. We expect that this functionality will be used much more widely, by a whole range of sectors. Knowledge is power and we expect that the companies who get to grips with potential issues in their supply chain will have a real USP in 2014.
•
Adrian Chamberlain is chief executive of Achilles
www.achilles.com
February 2014 Page 27
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