There’s no doubt that chief procurement officers are being asked to contribute to board-level discussions more frequently.
There are many reasons for this, and a call last week with many of our CPO members identified what some of those are. CPOs have an ever-brightening spotlight shining on their ability to deliver resilience, financial return and ESG impact.
But one of those present, representing a US-based speciality chemicals business, raised one issue, in particular, which is going to be fundamental to both boardroom discussions and CPO strategies over the coming years: single-source.
For the best part of half a century, we have been on a rampant journey towards globalisation and efficiency – driving out redundancy from supply chains, focusing on scale and developing global markets fuelled by technology and innovation.
It’s been halcyon days for procurement, as the low-hanging fruit of low-cost-country sourcing and the pursuit of single- or dual-source strategies have delivered huge financial returns to the bottom line. Focusing on fewer, global suppliers results in much greater economies of scale, albeit with a potential increase in risk.
The future looks different. We are moving into a more fragmented world, one in which the leaders of multinational companies must think in a very different way.
Is one global supply chain fit for purpose? Should individual supply chains support individual regions; regions that are defined by ideological and political alignment, rather than geographical proximity.
As a nuclear power continues to wage war on mainland Europe; as China maintains ambitions to grow its economic influence and, potentially, territorial footprint; as tariffs become a more prevalent economic lever; and as, in short, the world becomes more fragmented, CEOs and company boards will evolve how they structure their businesses and create value.
Procurement, again, is fundamental to much of this thinking. In the coming decades, multi-source strategies will become more prevalent; not just as a way to mitigate risk but also as a byproduct of building and maintaining the multiple supply chains required to serve the needs of large, ‘post-global’ organisations.
I&D Impact Awards: entries now open
Entries are now open for the I&D Impact Awards 2025, which recognise exceptional achievements in Diversity, Equity and Inclusion. With many procurement teams working to develop outstanding supplier diversity schemes that help create a more inclusive and equitable world, the awards are an important opportunity to celebrate the power businesses have to make a difference.
Visit the website to discover more and enter.
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