Jakarta Post
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This article originally appeared in The Jakarta Post. Procurement represents the lion’s share—as much as 80%—of overall costs in some industries, and companies like Walmart and Apple have demonstrated that procurement leaders are cost leaders in their industries, with a clear edge over rivals. Nowhere is the pressure to improve procurement as intense as in Asia Pacific (APAC), both for domestic and multinational companies (MNCs) that rely on the region as an important source of goods and services. Companies in developing countries like China wrestle with operations that have bloated during high-growth years. Those in developed countries like Australia struggle to shore up margins as top-line growth slows. Firms in all parts of the region deal with rising and volatile input costs. When we recently interviewed 60 business heads and chief procurement officers throughout Asia Pacific, 91 percent agreed that volatility continues to dominate their agenda. Those in developed countries like Australia struggle to shore up margins as top-line growth slows. Firms in all parts of the region deal with rising and volatile input costs. When we recently interviewed 60 business heads and chief procurement officers throughout Asia Pacific, 91 percent agreed that volatility continues to dominate their agenda. Leadership teams have dutifully set aggressive targets for reducing input costs—and usually in a short period of time. Despite their best intentions, however, many executives tell us they are simply ill-prepared to meet their goals. They readily admit that their companies rely on procurement capabilities that are no better than their competitors—and sometimes worse |