Buyers must prepare to deal with inflation caused by massive injections of government money into the world economy, say procurement specialists ADR International.

Robin Jackson, CEO of ADR International, says signs of inflation have already started appearing with the prices of commodities including copper, steel and oil rebounding from earlier lows.

For procurement professionals, he says, it’s the end of a “golden decade” when the only way suppliers’ prices seemed to go was down.

In the latest eBulletin from ADR International, Jackson suggests a series of actions for procurement professionals including managing senior management expectations of the continuous cost reductions they have been used to.

He concludes: “One thing is for sure: the risk of doing nothing is high. Inflation indicators currently remain subdued but that doesn’t mean inflation will remain asleep. When it reappears in 12-18 months procurement will be at the sharp end of all that government help.”

Rebecca Howard, Director of ADR Learning, the training and development division of ADR International, points to a looming skills shortage, including in procurement, recently identified by the UK Commission for Employment and Skills.

The commission said training has remained consistent despite the downturn, but urgent action is needed to prevent the UK falling behind its competitors. It urges a “simpler and more agile training system”.

Howard says internet-based eLearning could meet the need: “In the procurement area, as in other functions, eLearning has developed fast in the last few years, becoming more tailored to individual or company needs and targeting specific skills areas such as cost analysis.

“In the age of the internet, such solutions seem to fit the bill for fast, responsive, easily adaptable and highly-targeted skills development.”

John McCleland describes a project to change the way a major municipality in South Africa is using its purchasing power to help bring about change.

McCleland, ADR International Managing Consultant for Australia and South Africa, says procurement is playing a key role in tackling the economic problems remaining from the apartheid era.

“Right at the start we identified that procurement was viewed by internal stakeholders as an obstacle to providing efficient service delivery, reflected in a large percentage of spend bypassing the competitive bidding process,” he says.

The ADR International project is strongly supported by staff at the municipality and is proving that procurement can make a difference. “Regular stakeholder communication is starting to change the way people see supply chain management,” says McCleland, “and how it can help drive South Africa’s transformation.”

Source: www.adr-international.com