Bad Moon Rising…

If you don't get our monthly newsletter (next issue September) you can subscribe via the link at the bottom right of this page. We feature stuff that you get in the daily blog, but some material unique to the newsletter as well. Here is an excerpt from one such piece in the newsletter we published two weeks ago. We make no claim for great prescience (we hedged our bets as you can see) , but no apology for repeating it here after today's financial events...

Summertime

Summertime... and the living is easy. Fish are jumping, and the cotton is high” (Summertime, George Gershwin)
I feel the temperature rising... I feel there’s trouble on the way...” (Bad Moon Rising, Creedence Clearwater Revival)

What’s it to be...?

Europe and the Euro stagger from one crisis to another. Growth in the US falls and unemployment rises – shocking for this point in the economic cycle. Meanwhile the politicians can’t agree on how to address the budget deficit. Stagflation looks a dead cert for the UK and perhaps others. And in the Horn of Africa, millions are affected by terrible famine. And yet... more people in the world are moving out of subsistence living by the day. Share prices have held up well. (Well, they had when we wrote this...) Many large firms are announcing record profits. Japan is recovering from the tsunami, while the BRIC economies power on...

Some days, it all feels great. Some days, it doesn’t.

The summer often gives managers a bit of time to reflect. Not necessarily by going on holiday – as a CPO, I used to enjoy the lack of supplier and internal meetings, conferences and so on in the diary from late July to early September. Time to sit in the office and do a bit of thinking. So given the uncertainty, and if you do have a bit more time than usual, here are three potential areas for rumination.

1.  Risk – with uncertainty in the air, how does your supply chain risk profile look? Any implications if the Euro collapses? If the US defaults?  If we have riots in more African / middle eastern / European cities before the summer is out?

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We continued in that vein, but the point of repeating this now is to strongly suggest that you take a look another look at supply chain risk now in the light of current events. If you don't use Dun & Bradstreet, Xcitec, Achilles or similar (and they're by no means mutually exclusive) to help manage supplier information and risk, you may want to take another look at that type of service.

If things get nasty again, the basics like conserving cash, and making sure you get paid will become key. Commondity prices may fall.. on the other hand, if the BRIC countries aren't affected too badly and this is a crisis of the indebted "western" world, maybe they won't..

Anyway, it's looking increasingly like the Bad Moon Rising.. sorry. (But what a great song..)

 

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