On the Strategic Sourcing & Procurement LinkedIn group, I was involved in an interesting discussion regarding how to manage currency risks when buying from foreign suppliers. The discussion started when a supply chain student/intern asked if he can pay his supplier in both Euro and US dollars to reduce currency risk for both parties.
When I suggested the best practices for accomplishing the goal (which is what we teach in our online class “Basics of Smart International Procurement“), the student replied that he had gotten responses from others saying that they use the pay-in-two-currencies option.
This was a little scary to me. Not only do people use a less-than-optimal approach, but they also recommend it to others!
So then, I explained that “there are some things that can be done but the question is not whether something CAN be done, but rather whether it SHOULD be done.”
That premise, of course, applies to many things, not just global sourcing.
I recommend that you check out the discussion (and maybe contribute advice of your own) at http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=139021&discussionID=5372199. The group is run by Supply Excellence’s Justin Fogarty and, as you may expect if you’re familiar with Supply Excellence and their Twitter account, is very well managed. So you may want to join the group while you’re there and, if you haven’t already, join the SPSM LinkedIn Group as well at http://www.linkedin.com/groups?gid=145761.
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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