By Alois Vinga
UNITED Kingdom based Zimbabwean procurement specialist, Kuda Kadungure, has bemoaned the supply chain disruptions dogging global markets amid calls for stakeholders to put in place responsive measures.
He made the remarks during the Procurement and Supply Chain Live Conference on Wednesday in London
“The current trends have seen 94 % of Fortune 1000 companies in the United Kingdom see supply chain disruptions from COVID-19, 75% of companies have had negative or strongly negative impacts on their businesses and 55% of companies plan to downgrade their growth outlooks,” he said.
Kadungure who also serves as the head of procurement at the UK parliament was the keynote speaker at the high-level conference.
“Construction industry is experiencing unprecedented uncertain times, price volatility of labour and materials shortages. Within the matrix we also see rapidly rising freight costs, container availability and global transportation challenges,” he said.
The procurement buyer said there has been a shortage in global raw materials while hardest hit countries have a shortage of available haulier staff and capacity.
He said the Suez Canal blockage in March triggered a new surge in container spot freight rates which saw the demand for container shipping growing during the pandemic due to changes in consumer patterns and surge in e-commerce.
Kadungure said the underlying causes are complex and include changing trade patterns and imbalances, capacity management by carriers and Covid19 new ways of working and these combined factors have stubbornly seen high shipping costs for businesses getting sealed into contracts for the next 12 months which are here to stay.
“Against the background there is a need to carry out frequent supply chain risk reviews with contractors and suppliers. Incorporating contract clauses to address volatility – provide a means of collaboratively sharing the risks associated with this volatility can also be one of the solutions,” he said.
He called for the consideration of contractual incentives for contractors to achieve program dates and designing changes to allow for substitute materials while allowing longer mobilisation and lead-in periods for contracts.
The procurement specialist called for up-front ordering and payment to suppliers to secure manufacture and delivery slots for critical material resources.
“Procurement players can also assess and identify risks at each value chain node while building a supply-chain risk-management framework to improve visibility to get real-time visibility into operations. Monitoring risk to feed real time information to clients and contractors while increasing flexibility,” he added.