If you think you have procurement challenges, consider those responsible for purchasing for the 2016 Olympics.
We constantly discuss the challenges that procurement faces in the B2B sphere, but we rarely see how those challenges affect a specific situation…such as when dealing with suppliers around the globe like the 2016 Rio Olympics, which is a time-sensitive, world renowned, international event where the challenges become even greater.
Recently, I had the pleasure of speaking with PYMNTS.com on the risks and challenges facing procurement teams during the Olympics. The article cites the official 2016 Rio Olympics website to note that, “by the time the games start, the Olympics committee will have already procured more than 30 million goods, including sports equipment, accommodation items, like beds and mattresses, and way more.” And much of that procurement is achieved through cross-border transactions.
It’s not just the magnitude of the purchasing transactions and types of categories that create so much risk; I also noted that companies need to be quite concerned about the volatility of currency exchange rates, and other types of political unrest or uncertainty as a result of Brexit. With companies purchasing items in their local currency, they’re going to have to be extra diligent about FX volatility.
Other major issues related to cross-border procurement are logistics, where unexpected delays and shipping expenses could result in unanticipated price hikes; dark purchasing, where organizations are unable to track expenditures for a variety of reasons; and general political, regulatory, and tariff variables.
To learn more about these and other risks related to Rio 2016, read the full article.