23 April 2010 | Allie Anderson

Only one-third of companies have a strategy in place to mitigate the impact of exchange rate fluctuations, the latest SM100 poll has found.

Several respondents commented that fluctuating exchange rates was a risk that was largely ignored organisation-wide. Others said mitigation was something they wanted to see happen in future

Independent procurement consultant Tim Weston said that while some international organisations can move money between companies to reduce currency risks, most are “at the mercy of rates”. “Sometimes you win, sometimes you lose. That’s business,” he told SM.

Another buyer said: “It is possible to hedge your currency buying [but] that would require forward commitment to spend in that currency.”

One buyer said risk hedging was the responsibility of the supplier, adding: “It will give them the market advantage if they get it right when providing a quotation.”

Of the 34 per cent who have a currency risk mitigation policy, some said it was solely the remit of the finance department while others said it was managed by procurement.

Tom Woodham, director of supply chain consultancy Crimson & Co, said: “Exchange rates are a key part of the cost modelling that we build to assess the ongoing implication of currency fluctuations on sourcing decisions.”

Many of the 66 per cent of international purchasers who said their organisations have not implemented such a policy said it was not relevant to their business because they do not buy directly from overseas.

* There will be a feature on how buyers can deal with currency fluctuations in the 29 April edition of SM.