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Frédéric Pichard, CSC - SRM Barometer results part1

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At the outset, this crisis was a financial crisis, then it became an economic crisis, and today it has metamorphosed into a social crisis (with 10 million additional unemployed for OECD countries alone). This crisis also impacts innovation and, more particularly, consumption. Above all, products and services offered to consumers are no longer adapted to their desires or financial means. Our consumption habits have changed; this is perceptible in all major sectors of activity throughout our economy. For example, in the tourism sector, the hard discount sector, in the cosmetics and food sectors, this transmutation has compelled leading companies such as L’Oréal and Danone to adapt their offers and prices to meet clients’ requirements. This is, of course, also true for the automotive industry, where consumer behaviour change happened so quickly that most of the leading manufacturers were incapable of anticipating it. Procurement plays a specific role, especially in a period such as this, where all is concentrated on the ability to free up cash in the short term, either by bringing in more money or by reducing costs. One of the first priorities of procurement departments, just before the crisis broke out, was to renegotiate contracts with suppliers. As a result of this, among the primary consequences of the crisis, we noticed a double phenomenon, which began in October or November 2008: first of all, there was an extremely significant decrease in volumes purchased, followed by a drastic reduction in company inventories. In all likelihood, the crisis should accelerate and intensify value chain disintegration, for two main reasons: the first reason stems from the fact that, in developed countries, the difficulties related to purchasing power will exacerbate the pressure on prices, and in consequence, the pressure on producers. The second reason derives from the fact that, in companies, shrinking profit margins will necessitate implementing specific means to restore these margins. By stating this, we imagine two particular strategies: precipitating outsourcing and stepping up offshoring. Today, veritable sources of productivity are to be found in inter-company collaboration; for example, through the enhancement of a certain number of processes, from ordering to delivering, or through the pooling of merchandize and, more specifically, the shipping of such merchandize. Storage and shipping, to name but two examples, offer productivity reserves and opportunities for sustainable development.

Video Details

Duration: 4 minutes and 27 seconds
Country: France
Language: French (France)
Genre: None
Views: 104
Posted by: cscideas on Jan 15, 2010

Frédéric Pichard, Manager CSC, is discussing the SRM Barometer results and the new trends within procurement and logistics department.

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