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Modern business depends on flexibility perhaps above all — and that might go double when it comes to procurement.
In a nutshell, technology represents your best chance at "perceiving value" — that is, revealing hidden opportunities within the reams of data your company already produces. For a start, data-driven technologies can help businesses all the way up and down the modern supply chain with tasks like:
- Making companywide spending and sourcing more transparent
- Investing in more user-friendly tools for tracking shipments and delivery vehicles
- Using better tools for maintaining relationships with vendors and other partners
- Leveraging data and analytics for relevant, real-time forecasting and consumer insights
We'll look at these ideas and some others in greater detail below.
More Transparent Sourcing
It's common in procurement to have to deal with long lead times. Sourcing raw materials and unfinished products is a complex task, after all — and having the right materials on hand is a factor that must align closely with the long-term, over-arching goals and strategies of the company. So where does technology enter the mix?
To begin with, it's getting much easier to create and maintain immutable public ledgers with information about a product or material's chain of custody, including every stop it made on its way to your facility for finishing or assembly. We're talking about technologies like QR, RFID and Bluetooth tracking for shipments from source to end-user and supply chain-wide ledgers powered by Blockchain to record all the information for transparency and compliance purposes.
The end result is less busywork for your teams and another ongoing burden off your shoulders.
Better Collaboration Between Procurement and Other Departments
In a field like procurement and supply chain management, getting at and then leveraging your suppliers' accumulated and real-time data — plus tapping into their projections and expertise — remotely, whenever you need to, is possible thanks to supplier discovery platforms, intelligence dashboards and more.
Using cloud-based data-gathering tools to keep various interdependent organizations within a given market in constant contact with each other is key if each member of the supply chain wants as much warning and detailed analysis as possible about market trends and every other measurable variable that can influence the flow of materials, products and capital.
Even the separate parties within a single organization can benefit from the type of analysis that's possible when data is gathered from all across an organization. We're talking about:
- Marketing teams
- Procurement teams
- Connected machinery on the factory floor
- Salespeople out in the field
- Delivery vehicle routing and maintenance schedules
- Bookkeepers and financial strategists
- Information gathered from online interactions and customer portals
- And more
Gathering the right data from the right places can illuminate friction between a company's departments and discover ways in which effort is being duplicated or wasted. Again, a number of technologies might apply here, including real-time reporting dashboards, tracking software for exchanging and signing legal documents, the selective automation of bookkeeping processes through smart contracts and AI deployments and more.
One of the best examples of this type of digitized collaboration coming to life is a recent and exciting partnership between Kinetic12, a consultancy for the food industry, HAVI, a supply chain company and the International Foodservice Manufacturers Association.
Through the use of some of the technologies we've mentioned here, the collaboration should improve relationships between some of the nation's and the world's largest food suppliers and distributors — in part by helping all parties communicate better about, and react more quickly to, changing market patterns, supply levels and even customer habits. Such a collaboration will be driven by data from internal processes and customer portals in equal measure.
Adoption of Digital Inventories and In-House Fabrication
We'll look back on the arrival of non-cost-prohibitive 3D printers into the business mainstream as a watershed moment. It has already shown great potential in revolutionizing how replacement parts and many other types of components and products are sourced.
Each new iteration of printer technology improves the speed, adds to the already impressive list of workable materials and makes the price of adoption more accessible for small and medium-sized businesses. There are many reasons that 3D printers should be on the radar when it comes to procurement:
- They promote the use of "digital inventories," which replace extensive physical inventories with catalogs of parts and products that can be fabricated on demand.
- Businesses and customers increasingly expect variety, choice and customizability in a number of product verticals. 3D printers make it more cost-effective to offer personalization services.
- In-house equipment and even building infrastructure are full of parts that wear out regularly and need replacement. Using 3D printers as a reliable source of printed replacement parts for critical equipment can save money, labor and potential downtime. It might even help extend the life of legacy equipment for which replacement parts have become difficult to find.
Many of the other technologies on this list represent ways for the various companies within a major supply chain to work more closely or more harmoniously together. But 3D printers and on-demand manufacturing might be one way to actually lessen your dependence on some types of partners and become a little more self-sufficient.
An added bonus is that cast-off material produced during the printing process can be used again in future projects, which means you won't be sourcing materials for your printers as often as you might be dreading.
Ecologically Friendly Balance Between Efficiency and Profitability
This list has offered only a quick look at some of the ways we can expect technology to influence procurement in the future, along with other major players in our supply chains. Among other things, technologies like business data analysis and 3D printing can help businesses find and address wasteful indirect spending — an action that can potentially save companies 25 percent or more on their overall ongoing expenses.
The truth is, finding new ways to let technology make our processes leaner and less wasteful — and our use of resources less reckless — isn't just a business imperative — it's a civil and social one too.
As an added bonus, most of the technologies and interactions described here deliver the kind of data and oversight that's necessary for maintaining compliance in today's appropriately strict regulatory environment. Technology makes it easier, not harder, to discover opportunities for operational improvement even while satisfying regulatory and transparency obligations. If it sounds like a win for everybody involved, that's because it is.
