The webinar "Procurement: Keys to face the rise of industrial costs" was held on Thursday 11 November. The online event was organised by wherEX, a digital platform for B2B e-commerce, and was led by Felipe Manterola, its co-founder. The event was attended by leaders in the supply areas of large companies. On the one hand, Rodolfo Guzmán, Head Of Procurement of the salmon company Camanchaca and on the other hand, Eduardo Varetto, Procurement Manager of Lipigas, dedicated to the commercialisation of natural gas.

The supply crisis is something that is affecting both end consumers and companies, regardless of the industry to which they belong, nor the country. That is why these industrial sourcing experts shared experiences and discussed what is happening in global supply chains.

Container shipping container (or freight) bottlenecks at major ports in China and the United States and sanitary restrictions paralysing factories in Asia have made products that are vital to the operations of thousands of companies on every continent more expensive. The rate for a container between China and the United States, for example, rose 500 per cent in August (from a year earlier), according to Reuters. 

"As the demand for containers increases, the cost of tariffs soars by the same amount. And this, in turn, translates into higher costs for the products being transported. This is extremely relevant since around 90% of the products we consume are transported by sea," emphasised Felipe Manterola, co-founder of wherEX. 

Rising industrial costs

The wherEX Data Science team reviewed the categories of inputs and services (traded on the platform) that saw the largest price increases during the pandemic. Inputs for the construction industry were found to be among the most affected. Within this category, the goods whose values increased the most were: profiles and beams (33%), steel plates (18%) and steel and bronze bars (17%).

Attendees of the event, mostly executives of Chilean companies, found through a survey that their production costs have increased between 10% and 30% in 2021, due to the global supply crisis. Steel, for example, suffered an increase of 200% this year.

In this regard, Eduardo Varetto, Procurement Manager of Lipigas, said that "for us steel is a critical input because a large part of our strategic products are made of steel, such as cylinders, valves and tanks. And if we add to this the increase in maritime freight rates, the adverse effect that this situation has had on Lipigas' business is obvious".

The role of new technologies

The webinar also discussed the role of e-procurement, i.e. industrial procurement through the use of new technologies and software. According to the consulting firm EY, 52% of the world's multinational companies are currently taking rapid action to change their supply chains and 36% are accelerating their investments in technology and automation in this area. After all, digitising these processes brings great benefits for both buyers and suppliers. 

"On average, a traditional, non-technology-driven quotation or tender process receives 2.2 bids. While one conducted through wherEX generates 5.8 bids. In other words, there is more supplier participation and therefore more competition. This allows the prices of inputs and services to be regulated and leads to significant savings for the bidding companies. At the same time, new opportunities are generated for suppliers who can now compete on equal terms in a tender, with full transparency throughout the process," Manterola emphasised. 

For his part, Rodolfo Guzmán from the salmon company Camanchaca pointed out the importance of implementing this digital transformation in order to have a global and holistic view of industrial purchasing processes. "It is now a necessity to be permanently digitally communicated throughout our supply chain. That is why the benefits delivered by wherEX have been key for our operations".

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