I’ve often said how privileged a position chief procurement officers can find themselves in, being at the centre of a global value chain, with access to thousands of partners both upstream, internally and – at least in some cases – downstream.
Wielding influence over suppliers is a superpower that can be used to drive positive change, as well as improved business performance – often, both at the same time. And while one might argue that the opportunity to do the former is under greater challenge with a Trump administration, it still rings true.
We’ll be digging into how procurement can continue to focus on wider value deliverables – triple bottom line, sustainability goals, social impact and so on – through the course of the 2025 and beyond, but one word from my opening sentence is in significant retreat for the foreseeable future. And that word is global.
The pedants out there might argue with this (we’ll always be global, of course) but a conversation with a very well-respected consultant recently reminded me of just how important a point in history we’ve arrived at. “For the last 30 years, we’ve been helping CEOs and CPOs build global companies,” he shared. “We’re now talking about how to build and operate multinationals.”
They are very different. A multinational organisation is one that has been designed – structurally, strategically and commercially – to operate in multiple countries successfully, bringing localised identities and operations to have the biggest impact possible. A global organisation is one that uses broadly the same brand image, products and strategy everywhere.
The globalisation trend has been in retreat for some years (the Economist’s cover story in January 2019 was titled Slowbalisation, for example) but 2025 will mark a significant acceleration.
A survey we ran ahead of our CPO Connect call that was focused on Trump’s early executive orders showed how more than 60% of CPOs who responded would dedicate increased resource to nearshoring or local-sourcing strategies, with the remainder maintaining the same level.
While increased tariffs and political pressures will lead to large companies thinking more deeply about how they support the countries within which they are domiciled, boardrooms everywhere are busily trying to come to terms with what it all means for mid- to long-term investment strategies.
CPOs must ensure they are part of the conversation, because nowhere will a retreat from globalisation have a greater impact than in procurement and supply chain.
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