Combating Profit Volatility in the 'New Normal'

Though the shockwave that struck global markets in 2008 is receding, it laid bare a number of structural imbalances that CFOs must face and adapt to in order to succeed. One of the primary causes of these imbalances is the global decline in natural resources coupled with a bigger and more prosperous world population that is fueling a growing demand for food, goods and energy. This demand is predicted to be 60% higher by 2030, two-and-a-half times the expected population growth rate. As a result, we will see prices for raw materials, production, transport and distribution continue to rise, putting increased pressure on companies across every sector to remain competitive yet profitable. To be successful when facing this higher demand, or what we call the "New Normal," companies must focus on better supply chain management, adopt new procurement strategies and broaden their approach to managing risk and profit volatility.