Active management of the supplier base is a key concern for almost half the UK’s finance directors, according to exclusive research commissioned by VNU, publishers of Financial Director. Overall, 28% expect the number of suppliers they deal with to decrease over the next year or two, while 15% expect to have more suppliers on their books – a net balance of 13% expecting a reduction in the supplier base. However, companies in retail and distribution expect, on balance, to broaden their supplier base, while 32% of manufacturers and 40% of large companies – those with more than 1,000 employees – are expecting to offer larger deals to fewer suppliers. But most FDs say that exchange rates do not seriously hinder their ability to manage their supplier base costs effectively: only 14% say that currencies are an issue, though that figure rises to 30% for manufacturers and 23% for companies with annual turnover below £20m. Larger businesses may well be in a better position to hedge their exposure economically than smaller ones. Companies whose supply costs are affected by exchange rate volatility are almost unanimous in looking forward to the single European currency as a means of eliminating foreign exchange exposure. These findings form part of FAIR 1998, the Financial Director and Accountancy Industry Research, conducted by Benchmark Research on behalf of VNU, publishers of Financial Director and Accountancy Age. For more information on FAIR please contact Amanda Cowler on (0171) 316 762 or e-mail her at email@example.com.
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