Trade wars, Brexit and unexpected events like Covid-19 draw companies’ attention to the resilience of their supply chains. A supply network might have evolved over time with new elements added or changes made without too much thought about how they would affect a company’s risk exposure. We will explain why there is no simple solution to the problem. It is a complex optimisation issue as all measures like dual-sourcing, warehousing or outsourcing have both benefits and risks, not to mention the need to ensure social and environmental standards. We will share our thoughts and some good practices and will show how to systematically address the problem.

How to improve supply chain resilience with the help of economists Supply chain disruptions usually awaken companies to the problems they have within their supply network. For example, the 2011 Tohoku earthquake and tsunami led to the Fukushima disaster and shortages in the global electronics business. Now Covid-19 affects the supply chain of virtually every product and every business. We will explain why looking at supply chain resilience through the eyes of economists can offer new insights, increasing the awareness for potential risks and setting optimal incentives for risk management. Most importantly though, we will share how to prioritise the risks and focus on tacking those that make the most economic sense and thus improve supply chain resilience.

On Monday, 12 October 2020, Paul Milgrom and Robert Wilson were awarded the 2020 Nobel Prize in Economic Sciences for improvements to auction theory and the development of new auction formats. In our webinar special, we highlight the relevance of Milgrom and Wilson's research for businesses, and why their work is considered ground-breaking.

In procurement activities, numerous non-commercial factors typically play a role in the sourcing decision. However, most organisations don’t have the means nor the resources needed to finalise all relevant negotiations before or latest at the time of supplier nomination. The typical approach is therefore to divide the problem into two main streams: while the vast majority of technical and commercial aspects have been agreed on at the point of supplier nomination, many non-commercial factors, such as contract negotiations, are covered afterwards. This leaves open ends and therefore opportunities for the selected supplier to leverage their position in required post-nomination negotiations. The webinar will introduce game-theoretically optimised tenders and show that this award-winning approach allows to incorporate all non-commercial aspects into the supplier selection process. This does not only allow for the negotiation of all elements before supplier nomination, but also increases the buyer’s bargaining power. Examples from TWS procurements projects are used to demonstrate that this approach can deliver quicker and better results than conventional approaches.

Disruptions as a result of Brexit, trade wars and now Covid-19 are threatening to destabilise the global economy and generate new barriers to trade. All these developments severely challenge companies’ previous planning assumptions and require them to react. Procurement and supply chain professionals need to be able to rapidly adjust to changing market conditions in order to protect their companies’ competitiveness – short and mid-term. For most organisations, this means they will have to renegotiate major supply chain agreements and commercial arrangements and incremental improvements do not suffice anymore. Companies need to renegotiate better deals than their competitors to come out ahead of the competition. In our webinar, we explain how you can leverage game-theoretical concepts and insights from economics to structure complex (bilateral) negotiations and work towards a “desired state”, securing short-term results while protecting long-term competitiveness. The power of these concepts is demonstrated using a recent high-stakes negotiation between Intel and Apple, which took place mid-2019. By leveraging the promoted concepts, Intel – the clear underdog – changed the game in its favor and secured the best possible outcome.