As procurement and supply chain teams continue to adjust to inflation and cost pressures, the United States is gearing up for a significant presidential election. Regardless of the outcome, the results will undoubtedly impact businesses and supply chains—potentially driving global market volatility.
C-suite executives are already highly attuned to geopolitical uncertainty. According to an Economist Impact survey, one out of three C-suite executives identify geopolitical impacts as the top concern for organizational risk in the next 12-18 months. These abrupt changes place supply chains in the spotlight, as teams must guide their companies through unforeseen scenarios.
One concern is the recent strike by the International Longshoremen’s Association (ILA), which represents 45,000 workers at multiple major ports on the East Coast. While a drawn-out interruption has been avoided, businesses moving materials and products through these sites must have the visibility to know if they will be impacted and the agility to identify and execute on alternate routes. While the strike was averted, this was proof that organizations should be better equipped to adjust production plans and customer expectations.
With potential for even greater disruption, the U.S. presidential election is approaching, and procurement and supply chain leaders should be prepared to respond to new legislations, macroeconomic fluctuations, and other events that could directly impact their business.
Major market reactions
Since 2020, a combined and near continuous occurrence of geopolitical risks, economic crises, and other events have demonstrated that businesses that prepare based on forecasted threats fare better than those that only attempt to manage those that do occur. During these periods of volatility, procurement and supply chain should be viewed as the organization’s pulse: a key motion of a company to keep healthy and viable for the business to run smoothly.
Procurement, production, and sales teams must have a clear, mutual understanding of how adjustments to factors like consumer spending will impact the supply chain, forecast, and budget. This is especially crucial when figures fluctuate more than anticipated. For instance, according to a U.S. Commerce Department report, retail sales fell 0.8% from December 2023 to January 2024, a significantly larger drop than the 0.1% projected by economists in the post-holiday season. This pushes all facets of a manufacturer, including their supply chain partners, to adapt quickly and stay in sync.
Etosha Thurman is chief marketing officer, Intelligent Spend and Business Network at SAP.