Reader’s of this blog and attendees of the PERT meeting at the Brookfield Zoo on May 9, 2017 and the recent PERT meeting on November 7, 2018 will hopefully remember the call to action that we put out to all in our profession. It had to do with taking on the strategic Business Partner/Consultant role and start providing some intelligence to your corporation on geo-political risk. It is now even more critical; no one may be doing it in your corporation and we should be doing it anyway – it’s part of Category Management.
Stock Market is crashing as is the oil market. The middle east is at war again. Brexit is…well Brexit! China trade war continues to intensify. NAFTA is under fire. Steel imports are being taxed. South Korea is under threat from the North. Merkel is done. North Korea continues secret nuclear program. H1 visas impacting hiring, outsourcing or buying professional services. All of these are actual current headlines but these are also issues that were discussed at the PERT meeting on May 9, 2017. Now we’re not claiming to be clairvoyant but had you attended that meeting, you could have been back at your company 😊!! You need to be aware of each and everyone of these issues to run the most competitive Supply Chain and the most effective Category Management strategy.
When looking for competitive arbitrage, and that’s what all sourcing is, we must acknowledge that all arbitrage is dynamic and that it does get impacted significantly by geopolitical changes. And you are not insulated if you buy services(a myth) or if your Tier 1 suppliers are not impacted(you still have pass through risk from your Tier 2). Therefore, the competency you need to develop in your organization is one of identifying when arbitrage has shifted and when to move. Again, you missed two PERT workshops on this topic now 😊!!
This is also why Next Practice organizations focus on not just the tactical processes but also ensure that they have the strategic processes. We see too many clients focused solely on executing the best transaction not realizing that keeping internal stakeholders aligned is far more critical(Change Management) and that managing the suppliers after outsourcing is where the benefits are realized(Relationship Optimization). Similarly, they also ensure that their competency models are focused as much on strategic competencies(e.g. Consulting, Change Management etc. etc.) as they are on tactical competencies.
All of this presents an incredible opportunity for us to shift the perception about our function within our corporations. This is intelligence that we have to gather and curate anyway. With a little bit of effort, we can add significant value for our stakeholders and forever change their perception of us.
The geo-political landscape will continue to be roiled for a bit yet. What that means for us is that it represents an opportunity to create even more competitive arbitrage by creating more intelligence faster and then acting on it – e.g. be the 1st to exit a geography when trouble hits. It also represents an additional opportunity for us to provide that same intelligence to our stakeholders and play that strategic business partner/consultative role that have long craved. Carpe Diem!!