The recent decline in crude oil prices, which hit multiyear lows, is expected to persist through 2015 and beyond. The impact of this market shock is expected to be felt across all commodities and supply chains. The key drivers behind the decline are lower expected global economic growth and sustained high supply. The impact on other major commodities has been significant, with energy prices declining by an average of 40 percent and grains declining by almost 20 percent. Industrial metals have been a mixed bag, with some seeing price rises and others declining. To capitalize on this global phenomenon, enterprise sourcing and procurement teams should consider four key strategies: monitoring market trends and adjusting procurement strategies accordingly, leveraging commodity price hedging, exploring alternative suppliers and sourcing locations, and optimizing supply chain processes to reduce costs.
