A Global Procurement Perspective on International Trade

A Global Procurement Perspective on International Trade

Procurement is a profession driven by the linking up of suppliers and buyers of essential goods and services, whether that’s a simple purchase requisition or a complex tender event. In today’s interconnected marketplace, those links are becoming increasingly international.

The modern, globally connected landscape means that even for a focussed domestic organisation, events that occur on the other side of the planet can have a profound effect on your own business. Procurhere’s e-procurement solution offers a powerful platform to enhance your procurement function in our connected world. Efficient requisitioning and e-procurement provide a firm foundation for a resilient, globally-competitive business.

Champions of global trade, the World Economic Forum, are quick to advocate the benefits of e-procurement. They highlight a study undertaken in 2011 which shows how government e-procurement could save billions of dollars by tackling maverick spending and reducing procurement costs in focus country Bangladesh alone.

As businesses we’re conscious of the need to tread a careful path towards success. The first step on that journey will always lie in understanding the terrain. So in a world of international trade, we want to explore the sheer scale of modern global trade networks, and what lessons that can teach us about procurement.

A world of trade in numbers

We talk about the reality of our world of international trade, but the truth is always in the numbers, and the numbers we’re talking about are huge.

1.7 billion: the total metric tonnes of goods shipped globally each year.
1.53 billion: the total metric tonnes of goods transported by ships alone.
90%: the share of global trade transported by ship.
50,000: total number of merchant ships on our oceans.

Our oceans are the lifeblood of international trade, and one of the most important arteries is right here off the coast of Malaysia. The Strait of Malacca is sometimes cited as the world’s most important trade route. It’s estimated as much as 50% of total global seaborne trade tonnage travelled through the Strait in 2010. As huge investments in Malaysian ports take root in 2018, that window to the world becomes an increasingly important opportunity for Malaysian businesses.

These essential trade routes can have a huge impact on the cost of goods, and ultimately a huge impact on our strategic procurement function. Instability, or just plain bad weather, can deliver challenges to supply that have consequent impacts on both cost and availability of crucial materials.

When it comes to trade, global business will always find a way. In the most valuable cases that often means taking to the skies, so let’s explore the airways in numbers.

52 million: metric tonnes transported by air in 2016
US$18.6 billion: value of goods transported by air each day
35%: total value of global trade transported by air in 2016

Whether by land, sea, or air, the world of global goods shipments is the beating heart of international business. But what lessons can we learn for procurement?

Connections are important. It’s such a simple conclusion, but one that is crucial to any business in our modern world.

At the heart of international trade is a web of global business partnerships. The truth is a well-maintained business relationship is as important today as it was a century ago, and utilising the skills learned through our procurement experience will help us thrive in a global environment as much as it does domestically. We should be mindful of the continued need to nurture and maintain those connections.

As procurement professionals we should also be conscious that we’re operating in a globally competitive landscape. The connections that bind our world together also open up possibility for greater competition. That means we must always be ready to embrace new opportunities to keep our businesses ahead, with e-procurement being just one important example. Procurehere offers a significant opportunity to remain competitive by delivering a more efficient, cost-effective procurement function for your business.

Equally, we should be careful in our increasingly global world to appreciate the connections that we already share. Working closely with our suppliers and supply chains, maintaining strong business relations with established partners, should not be neglected in the face of new opportunities.

Whether it’s the ocean highways that carry our goods, or the positive relationships on which good business is founded, when it comes to a world of international trade: connections really matter!

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