Procurement Intelligence Unit

Millions of workers around the globe are over the moon that the FIFA World Cup is finally here, but companies will have to keep an increased eye on employees 'sickness' records during the coming month. This goes to show that supply chain management is a funny old game, and the coming tournament in South Africa provides us with a few lessons in procurement management.

The first of these is in relation to checking the quality of delivered goods. Spanish goalkeeper Iker Casillas denounced the official match ball as "rotten". US goalkeeper, Marcus Hahnemann, believed that the new ball, much like the atom bomb, should not have been invented, adding: "technology is not everything."

The recent controversy over the ball may suggest that FIFA is lacking in crucial quality assurance procedures in its sourcing structures. The ball, designed by Adidas, is a long-time partner of FIFA, suggesting that a closer supplier management system could be placed in operation. The world football body may consider implementing a 'managed service' model in future purchase arrangements.

The World Cup is said to be costing South Africa US$3.5 billion in stadiums, transport and organising the events, in a total preparation spend of US$6 billion. Although strong on paper, doubts surround the effectiveness of government financial management. The Finance Minister recently announced that billions were lost through poor public procurement procedures, but the government promised to give 110% on ensuring strong spend management in the future.

The country hopes that there will be a significant transport legacy. However, concerns have been raised over South Africa's ability to transport large number of fans after trade unions crippled the train and port systems by prolonged strikes - with future strikes threatened in the future.

Procurement is a game of two halves. The joy of the supplier will bring tears to the eyes of buyers. Similarly, the effects of the tournament will be felt by businesses around the world.

Although early doors, businesses are concerned about the emergence of a 'sickie epidemic'. A report in the UK suggested that up to 40% of the workforce could take unauthorised absence in the coming weeks, costing the economy £1 billion. Workers in the Brazilian public service will be given time off when their national team is playing.

To be fair, there are significant economic benefits also. Wal-Mart anticipates that sales in stores in countries with teams in the finals will increased by 1-2%. Asda, a UK subsidiary of Wal-Mart, forecasts sales of South African wine will increase by 40% and the supermarket will be running its socks off to score big on this product line.

A study by Dartmouth University found that stock markets are linked to national football results. Exchanges decline on average by 0.39% after a national defeat at the World Cup. JP Morgan deployed its astonishingly accurate quantitative methodology model to predict that England will win the World Cup.

Given the size of the UK economy, the psychological boost that this will give to consumer spend may act as a significant boon to world GDP. Speaking as an unbiased Englishman, we will all be hoping that Wayne Rooney will lead global markets out of the threat of recession. At the end of the day, given recent economic news, perhaps a tacit acceptance of English victory is the only way the world can sidestep a double dip recession?