Top 5 Interesting Trends to Watch Out for in Manufacturing Procurement
Hello readers! In this week’s post, we’ll be focussing on trends and insights that are moulding procurement trends in the manufacturing industry. During the last few years, we have seen mega-mergers and mammoth global supply chains spanning a dozen countries and expanding across continents. This trend drove top companies like Samsung, Apple and Toyota to focus on end-to-end supply chains, that add value to the final customer.
The key trends shaping these mammoth supply chains were integrated business systems, cost transparency, value creation and more. But the pandemic put an end to these trends! So, how will procurement look a few years down the line.
Join us, as we take a look at the major trends shaping manufacturing procurement.
Ten Key Trends that Will Shape Procurement in this New Decade
- Value creation to get more priority than just focussing on price management
- Supplier relationship management to be integrated into the supply chain as a core competency
- Portable manufacturing that will not be disrupted by local lockdowns and border closures
- Innovative tools and practices for supply chain success
- Internal and external collaboration among business partners
- Increase in workforce to meet contingencies
- Shorter product lifecycles
- Companies will prioritize logistics, distribution and asset management
- Business strategy will be aligned to the supply chain
- Transparency, flexibility, and agility will be the core pillars of successful supply chains
Let’s take a closer look at a few of these trends and how they are shaping procurement in manufacturing.
#1: Localisation of Suppliers
Even before the pandemic, due to global trade wars, more and more companies started the search for alternative local suppliers. With the pandemic disrupting the global supply chain like never before, this trend has gained further prominence. Additionally, companies are looking for small to medium scale local suppliers to tap deep into local resources and to promote diversity.
#2: Cost Reduction
Long-gone are the days when companies signed contracts with a supplier for a long-term basis. Companies these days periodically review the performance of suppliers in real-time. Advancement in data analytics make it possible for companies to periodically assess and predict supplier’s performance. Companies are keen to develop a list of alternative suppliers to reduce supply chain costs and to improve efficiency.
#3: Real-Time Risk Management
Procurement is a highly complex industry and it’s not possible to predict risks. Take the recent example of the Suez Canal blockade that brought huge supply chains to a standstill as hundreds of cargo ships got delayed on either side of the channel. Even the most sophisticated AI system couldn’t have predicted that delay.
With that said, companies are looking for agile suppliers who can overcome risks smartly. Every stakeholder in the supply chain is prioritising risk management to mitigate the effects of supply disruption. Risk management is a key parameter that helps to ensure continuity of supply even when unexpected situations arise.
Another key factor that helps in mitigating risks is supply chain transparency. When all these factors come together – transparency, risk mitigation, and risk management – supply chains become robust and efficient.
#4: Talent Procurement
Today, advanced technologies emerge faster than ever. But the biggest challenge is finding the right talent with new skillsets to work on these new technologies. This is a major challenge for manufacturers and prevent them from implementing these new technologies.
Manufacturers, suppliers and other stakeholders have two options – either hire new talent or upskill existing workers. Alternatively, some companies are engaging consultants for specific projects with the help of skill aggregators. Today, remote working has advanced so much, that it’s possible to hire the best talent from any corner of the world.
#5: Greater Supply Chain Integration
The various procurement trends are inclined towards closer integration of supply chains in various aspects like new product development, demand and supply management, lean production and in shortening product lifecycles. Suppliers who can meet all these demands are gaining an edge over others.
Wrapping Up
While it’s true that no one can predict the future, we can make intelligent guesses. Use the trends above to secure an advantage over your competitors. As the top industrial procurement and manufacturing sourcing services , EuroIndustriel can help you implement the best practices and elevate the efficiency and operations of your supply chain. To know more, get in touch with our team.
