If you've been to the grocery store in the last couple of months, you may have noticed that your total costs are far higher than before. Prices on items like food, housing, gasoline, and utilities have risen by over 9.1% over the last 12 months – a 40-year record, according to the U.S. Consumer Price Index.
Why is everything so expensive?
A lot is working against the global economy:
Covid-19 continues to affect manufacturing and logistics around the world.
The war in Ukraine continues to have an impact, especially on grain production for much of Europe.
The U.K. is facing unprecedented increases in energy price caps.
These combined events are the perfect recipe for supply chain shortages and drastic price increases.
All eyes on procurement
Businesses are facing uncertainties unlike ever before, causing CEOs to look closely at what is happening behind the scenes. Procurement is under scrutiny with central purchasing being pushed into organizations' spotlight.
One such question being asked of procurement is, "Do we have approved alternative sources of supply in place?" Building a diverse supply chain is key but not always easy.
You might source goods or ingredients from various vendors for a product you manufacture. Still, all it takes is one ingredient to be delayed because of rigorous testing, approval processes, or even that supplier's supply chain for the whole operation to halt.