With the U.S. election on the horizon, procurement teams are bracing for potential policy changes that could affect supply chains, regulatory environments, and market dynamics. Post-election scenarios could introduce new trade agreements, tax structures, tariffs, and environmental regulations, necessitating proactive procurement strategies.
Etosha Thurman, Chief Marketing Officer of Intelligent Spend and Business Network at SAP, highlights the need for preparedness. Despite procurement and supply chain departments beginning to recover from inflation, the upcoming U.S. election could trigger rapid changes.
Thurman warns of the potential for swift implementation of new trade restrictions. She advises companies to plan ahead by exploring alternative suppliers domestically or in countries with less political and trade tension. Consideration should also be given to potential capacity constraints, logistics implications, and import tariffs.
Leveraging Domestic Incentives
Both administrations propose various incentives. In the realm of procurement, new domestic incentives could make domestic production and purchasing more attractive. Thurman cites tax incentives like the domestic content bonus credit for building with U.S.-sourced steel, iron, or manufactured products as a way to offset the cost increases of shifting production from a lower-cost country.
In recent years, procurement teams have proven adept at navigating fluctuating macroeconomic conditions. An Economist Impact survey found that one in three C-suite executives identify geopolitical dynamics and impacts as procurement’s top priority for organizational risk in the next 12-18 months.
Navigating Change with Confidence
A well-prepared procurement function can not only withstand potential disruptions but also capitalize on new opportunities that arise in the shifting political and economic landscape. By staying informed, agile, and technologically equipped, procurement teams can confidently navigate post-election changes, ensuring businesses and supply chains remain competitive and resilient through transitions of power.