2009 will be a year of challenges and opportunities for Procurement. Should Directors be keeping with the procurement strategy developed in 2008 or should they abandon it for the tactical activities that the business may well be pushing for?

In tough times with a declining demand profile businesses need to focus on profit, cash flow and management of risk. Most organisations will have already opted for some tactical activities in late 2008 as pressures from senior management to cut costs cascade through the business.  Cutting back on discretionary spend has been common place; reducing of labour costs, cancellation of projects, and redundancy programmes have also featured recently in the press.

But what for 2009? Should the scarce procurement resource be directed to further short term actions, or should they stay focused on delivering existing longer term business projects, to time and budget,delivering the savings projected?

Alternatively, should a root and branch review be carried out to identify new opportunities that the market can offer? One thing is certain; the current market conditions are unprecedented, with deflation, fluctuating exchange rates, highly volatile commodity prices and growing risk of established suppliers filing for bankruptcy.