Thursday, 22 August 2013

Supply Wars: Spain v Gibraltar

I've decided to return to the theme of Supply Wars but from a different tack. It's now a fairly daily occurrence hearing news of the diplomatic abbess between Spain and Gibraltar. Today's news was slightly different in that we are now seeing public procurement becoming one of the chess pieces.

In a nutshell, Gibraltar had ordered 10,000 tonnes of sand from a Dutch company but less than 3,000 tonnes has been received. The Spanish have intervened and halted the supply in response to a claim from an environmental group that the sand being supplied is from a protected area.

Gibraltar claim they have taken every step to ensure that the sand has been legally extracted and that the Dutch provider says it has provided copies of the relevant licences. I have insufficient understanding of the specific procurement to comment on the efficacy of the procurement.

To me this has the hallmarks only of a first skirmish - an end of season shortage of wouldn't normally make the news. However, skirmishes generally fit within a bigger theatre and that's what should be the focus. Procurement has been demonstrated to be both political and tactical, my suggestion is that it also needs to be looked at more strategically.

I if were advising both countries I would suggest a mapping of the existing and anticipated trade using Kraljic's matrix. If I were advising Spain I would target, for supply chain disruption, those procurement's in the 'Bottleneck' quadrant. If I were the UK and Gibraltar, on the other hand, I would now start to put in place risk management strategies and alternative sources for those 'Bottleneck' categories. This isn;t protectionism, this is pragmatism.

Of course while I'm talking about strategic procurement at a state level, there is also a need for those in the UK and Gibraltar, who procurement from Spain and it's sympathisers, to also carry out a risk assessment and put in place mitigating plans. This could get very messy in the supply chain world.

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