Inflation: Is Procurement Getting The Support We Need?
Procurement professionals are dealing with the impact of unprecedented levels of inflation. But are we getting the support we need from our professional associations?
Inflationary pressures in the supply chain shouldn’t be news to anyone now; nor should the work that procurement professionals are putting in to mitigate risk and rising costs for their organisations. Global conditions are challenging and don’t show any signs of abating either.
According to the UK Office for National Statistics (ONS), the Consumer Price Index (CPI) rose by 9.4% in June 2022, a monthly rise of 0.8%, continuing the trend of rising inflation that has been present since the start of 2021. In the USA it’s much the same. As of June 2022, the rate of inflation had risen to 9.1%, representing a 40-year high, before dropping back slightly in July to 8.5%, with core inflation lower than predictions at 5.9%.
Even though there appears to be some relief on pressures on the horizon as logistics disruptions ease and oil prices begin to drop slightly, it is a situation that has left even the most seasoned of procurement professionals reactively fighting emergent issues, while largely having to park a savings agenda for the first half of the year.
In this situation, professionals would look to their professional associations for help, support and advice on how to best handle the situation. But are procurement’s two main professional associations, CIPS and ISM, doing everything they could be doing to support their members?
CIPS – Behind the ‘Member Wall’?
First let us consider the Chartered Institute of Procurement and Supply (CIPS). A quick search for information on inflationary pressures points you in the direction of CIPS’ Supply Management website. There are several articles signposted on the website, some of which highlight specific actions companies and industries are taking to combat the issues.
Other articles cover research that has been carried out by key procurement-centric organisations, such as Ivalua, on the issues facing procurement (e.g. suppliers taking advantage of the situation to unjustifiably hike up prices) and strategic courses of action organisations could take (e.g. focusing on agile or nimble procurement to stay ahead of the curve and avoid unnecessary inventory).
There is information on actions that organisations have been taking to cut their costs, and some long-term actions that organisations can assess with suppliers for locking in prices, creating strategic supply partnerships and looking at longer contracts. However, few articles are original content from the Institute itself, which is somewhat surprising.
CIPS’ ‘Global Sourcing Insights’ has further knowledge sharing, but much of the content is behind a member paywall. This is not a criticism of the Institute, though it does reflect the changing nature of the profession and the expectation of providing members with access to additional key content and insights.
ISM – Indices and Data-Driven Knowledge
Jumping across the pond, we come to the Institute for Supply Management (ISM). It’s a similar story with the search on ISM, with the majority of the results pointing to ‘Inside Supply Management Magazine’.
As with CIPS, the articles lean towards the more generic advice for organisations, but with some tangible actions organisations can take. There is a mix of ISM’s own, original content, as well as third-party led content for research and knowledge sharing. As with CIPS, the content is high-quality and freely available to global professionals. However, also in line with CIPS, there is a large amount of information also behind the member paywall.
Where ISM differs is in two key sources. Firstly, within the ‘Inside Supply Management Magazine’ there is a set of articles from its ‘Report on Business Roundup’ section. These are monthly articles which look at the data behind the numbers – in this case in relation to inflation – providing good context for current events.
ISM also has its own set of indices, updated on a monthly basis. These build on the data in the Business Roundup, showing specifically where pressures are coming from and which areas are likely to see them next. These in turn have led ISM and its partners to carry out surveys and research, from which they have created White Papers with advice on managing inflation and risk.
Free to Access the Way to Go?
It’s very hard to criticise either CIPS or ISM for less free-to-access content. The information that exists is excellent, providing knowledge sharing and advice, though largely in a digital context. There might be an expectation for more content, particularly given the nature of the topic, but it’s unrealistic to expect the Institutes to cover everything in forensic detail and still maintain the high quality content that they provide.
This is a role where other organisations and networks are thriving, and can provide key support and assistance to professionals. Outside of the professional associations, these organisations are sharing tips and advice applicable to everyone, as well as specific strategic knowledge sharing that can help professionals dig deeper into mitigation or proactive activities.
The changing nature of the profession means it is now more likely for key content to be found behind a member paywall, as member fees and support are fundamentally how these Associations survive.
However, at a time where procurement itself is as challenging as it ever has been, it would be good to see Associations working together, or openly sharing information with professionals globally, so procurement has the ability to work together to find solutions to key issues.
