All posts by Procurious HQ

What are the Key Procurement Trends for 2016?

Did you successfully predict the key procurement trends in 2015? Chances are good that you were able to pick out at least a couple of the major themes appearing in the news and industry reports. But what does the coming 12 months have in store for the profession? Ethics, sustainable procurement, relationship management, technology and social media – these were just a few of the topics highlighted by the Procurious community when asked this question in 2015. Sure enough, a number of these themes were prominent in news stories and organisational strategy last year.

Roll on 12 months and there is a fresh set of trends to keep up with in order to remain relevant. We’ve picked out a few that we think will be making headlines, prompting discussions and keeping organisations on their toes in 2016. 

Technology

  • Rise of the Cloud

Last year we spent a lot of time discussing the Internet of Things (IoT) and its growing impact on procurement. However, it’s clear that many procurement teams have yet to get to grips with the Cloud. However, procurement has a great opportunity to leverage Cloud software in a number of ways, including as part of supplier collaboration.

The Cloud will allow ordering to be streamlined, increase visibility across the supply chain and allows for changes to be made more easily, even when goods are in transit.

Del Monte has already taken this step by moving its supply chain data to the cloud. The company can now access a wealth of global data, create orders, place contracts with suppliers and collaborate with partners, all in real time. Thus far, it has led to a 56 per cent saving in customs broker costs, better visibility and a 26 per cent reduction in inventory due to better information on goods in transit.

  • Improvements in eProcurement

As technology advances, systems that have been around for a number of years will have to play catch-up. Spend management and eProcurement systems are just a couple of those platforms that are in need of a reboot (while taking into account that organisations still need to be more selective when choosing theirs).

Better technology will allow for faster purchasing activities, and eventually enable an experience more comparable to what we are used to as individuals when we shop online. This will, in turn, mean that rules are less likely to be bent to “get the job done”, maverick spending and policy breaches should decrease, and procurement can stop being seen as a roadblock.

People

  • Meeting the Needs of Millennials

In truth, this could have fallen into the Technology section, but it’s important from a people perspective too. Millennials have high expectations, sometimes unrealistic, as to how procurement could and should be done, particularly when it comes to technology. Businesses need to be up to date as far as technology and connectivity go in order to meet these expectations and retain their millennials, as well as deal with other millennials working in the supply chain.

Why is this a people issue? Because if you’re not doing this, someone else will be and the best millennial talent will get a job with them instead.

  • Meeting the Students

Organisations need to know where they are going to get the best people to fill their job roles, plus meet the rising expectations of the business. Universities and colleges are prime places to be doing this.

Work experience, apprenticeships, placements and sponsorship are all great options for organisations to attract current students and new graduates and school leavers. 2016 could be the right time for you to speak to the educational institutions near you and see what you and they can do together.

Risk 

  • Cyber Security in Contracts

Research suggests 78 per cent of organisations have experienced a data breach within the past two years. This goes beyond the high-profile examples of 2015, but puts a spotlight on the need to account for this risk as part of procurement contracts.

A lack clarity on who is responsible for the data within supply relationships, and how it can be stored securely, as well as plans for contingencies should a data breach happen, could leave both procurement and large parts of their supply chains exposed.

  • Supply Chain Transparency

Ok, so this isn’t necessarily a new procurement trend, but it’s one that’s going to get even more focus than in previous years. You just need to look at the new towards the end of 2015 (think Nestlé) to see stories of slave labour in supply chains.

From paddock to plate in restaurants and the food supply chain, to tracking clothes from the plant they were created from, there are a variety of areas that can and will be tracked.

Technological advancements (such as the Cloud), increasing mobile empowerment and increasing public scrutiny in this topic will certainly cause this to be close to the top of the vast majority of procurement departments’ risk agendas.

What do you think will be the key trends? If you have your own ideas, why not start a Discussion and share them with the rest of the community.

The Benefits of Balance in 2016

Balance is a hard act if you’re trying to survive and thrive in the corporate world. But balance is key to getting through your busy day – and out the other side. 
Mindfulness

Work impacts on the lives of corporate citizens more than ever before, making it difficult to find time to achieve balance.

But don’t feel bad. Corporate types need to accept that work/life balance is a myth. Instead, they should focus on finding a way to balance the constant imbalance that exists in their life, advises CEO and founder of Wellineux, Amanda McMillan. Wellineux runs corporate retreats and other programs in Australia.

Take a Minute for Yourself

“The reality is that we work in a 24/7 society now, given the proliferation of technology, so it’s about finding ways to slow down that internal busy-ness so you’re not always in that stressful feeling of flight or fight mode. This is a feeling that can eventually make us feel exhausted and worn down, meaning we’re not performing at our best or thinking clearly,” McMillan says.

The truth is that it can just take a minute or two to think about the little things that can have a positive impact on your day. Considering what could make you feel 5 per cent happier during your day is a powerful exercise, McMillan says.

“Calling someone you love on your lunch break to say hello or stopping and pausing for a few minutes during a stressful part of the day can actually contribute to making you far more effective during your work day,” she says.

Rise of Mindfulness

Given the constant corporate pressures on us all, the practice of mindfulness is starting to creep into the corporate vernacular, according to Gillian Coutts, Australian partner for organisational effectiveness program based on mindfulness, The Potential Project, and co-author of One Second Ahead.

Mindfulness is not for tree huggers or yoga practitioners, but for leading edge professionals who understand our neurological limitations and see value in the skilful introduction of mindfulness into their organisation’s culture, she says.

“While technology has been a boon in many respects, it has also meant the boundaries between the space and time of work and home have become much more blurred. Learning to cultivate balance when there are no clear boundaries is a challenge for anyone’s wellbeing, productivity and creativity.”

According to science, our mind wanders for almost half of our waking hours, which can make it difficult to get that all-important downtime in our life, she adds.

“From an evolutionary perspective, the ability to think about things that are not happening right now was a significant advantage. But in today’s complex, fast-paced, demanding work environments, it just makes us less productive and more likely to make mistakes,” Coutts says.

Applying Mindfulness

If you’re unsure if this is true, set a timer for one minute, pick a thought and try and think of nothing else until the time ends. If you find this difficult, you are completely normal in that you have a wandering mind, she says.

Mindfulness training has proven to help us with impulse control, and can help us clear a cluttered mind that has become filled with our long ‘to do’ list, and pause in a moment of busyness and make a choice about what is most important to do now, Coutts explains.

“Balance is determined by our state of mind. It’s not always easy, but learning to be mindful and present to whatever is here, now, and being able to let go of thoughts about the past or the future is a challenge for anyone’s wellbeing, productivity, and creativity.

“A growing body of scientific studies demonstrate that the mind can be trained to enhance focus. This mind is like a muscle. If you want it to be fit, fast and high-performing, we need to train it. And specifically, mindfulness training has been shown to enhance focus, so we’re better able to manage our attention.”

Remember that our brains are habitual, which makes it easy to get caught up in negative work patterns, making it difficult for organisations to change, Coutts says.

The Best-Laid Plans

To test this out for yourself, close your eyes and visualise hearing news that the leader of your organisation will be announcing major changes tomorrow. Take a moment to reflect on how this makes you feel. Are you excited to hear what’s in store, or dreading what your brain has already decided will be bad?

“Most of us spend the majority of our time thinking and behaving in habitual ways. Even if we recognise benefits of changing how we operate, our brain’s natural response is to resist. It prefers things to be done like they were done before, which can be limiting in modern-day work environments,” Coutts says.

While planning time for mindfulness is key, the best laid plans go belly-up when a client has a crisis or there’s another drama at work.

“The imbalance we experience is really determined by our state of mind. It’s not always easy, but for me, learning to be mindful and present to whatever is here now, and being able to let go of thoughts about the past or the future when necessary has been vital.”

Vote for Procurious in the UK Blog Awards 2016

How often do you find yourself coming to the end of another smashing Procurious blog article and think, “Gosh, that was great! I wish there was a way for me to acknowledge just how great that was.”?

UKBA16 Vote Now

If this sounds like you (and we wish everyone did think this!), today is your lucky day! Throughout January, you can vote for Procurious in the UK Blog Awards 2016.

Blog Awards

If you haven’t come across the UK Blog Awards before, they were created to recognise ‘true viral style and creative excellence across a variety of 16 UK industries’, and celebrate the best of British blogs from both companies and individuals.

Now in its third year, the Awards offer individuals and companies the chance to promote their business and content, but also to network with other blogging professionals across a whole range of categories, including Digital & Technology; Education; PR, Marketing, Media and Communications; and Travel.

You can find out everything you need to know about the Awards, the categories and previous winners here.

Your Vote Counts

Procurious entered the Blog Awards for the first time last year and were delighted to be awarded ‘highly commended’ in the PR, Marketing, Media and Communications category. This represented a great achievement for us in what was our first full year of curating a blog.

However, this year we want to go one better and win! And this is where you come in. We need your votes – as many votes as possible – in order to be considered for the final category shortlists. The more votes we get, the better our chance of consideration.

Voting is now open and runs until the 25th of January at 9pm. It’s dead easy to vote too – just go to the Procurious profile on the UK Blog Awards website, and click ‘Vote Now’ at the top of the page. You can vote once per day for our entry (even from outside the UK), and we appreciate any and all votes we get.

And, if you’re really keen, you can share this with your colleagues, peers and friends across social media and get them to cast their votes too!

What it means for Procurious

As we have said, the recognition last year from the UK Blog Awards was a big deal for us. Going on to the next stage and being shortlisted at a national level, and potentially being one of the judges’ picks will help to build awareness of Procurious both within the blogging community and across individuals and organisations.

As we build more awareness, and attract more people to the community, the networking opportunities for all our members grow, the richness of the discussions increase, and we can continue to provide high-quality, relevant content for all our members, plus all our followers on social media to read.

Details

If you want to refresh your memory of some of our, and our contributors’, best and most popular articles from the past 12 months, head over to the blog to check them out or read the ‘Best of the Procurious Blog 2015’.

Every vote you cast really does count. To vote, go to the UK Blog Awards website and visit the Procurious profile. Thanks!

Be Social to Perform

Marc Zuckerberg, the father of the most well-known social network recently stated: “I think a simple rule of business is, if you do the things that are easier first, then you can actually make a lot of progress”.

Be-Social

We probably all believe in the use of social media and social networking pages, however up until now there was no academic evidence that job related use of social media for procurement managers actually positively affects their job performance.

A recent study of Maastricht University, School of Business and Economics (NL) revealed interesting insights and proofs that social media, if used and applied correctly for the job, can actually increase individual job performance of procurement professionals. Prof. Dr. Frank Rozemeijer and Jonas Heller developed two research models – the one that explains the relationship of the job-related social media usage and procurement job performance will be covered in this article.

Positive Relationship

Companies usually tend to block social network sites for their employees to prevent distraction at the workplace or reduce the perceived security threat of public networks. According to the study of Maastricht University, procurement companies should reevaluate their social media policies for their procurement professionals.

The study tested the relationship of active and passive job related social media usage on procurement job performance. “Active” job related social media usage is defined as creating & sharing content with the community or engaging in on-line discussions communication, whereas “passive” usage implies searching and consuming content created by others. A positive direct relationship was found for both, active and passive job related social media usage.

Networking and Learning

In addition, to understand how the use of social platforms affects the procurement manager’s performance, the study investigated on two important tasks which are part of a procurement manager’s job: Networking capabilities and individual learning.

Networking capabilities are described as a managers capabilities to establish, maintain and develop (business) networks. Individual learning describes an individual’s capability to build knowledge through reflection about external stimuli and sources, and through using this knowledge in the workplace.

Procurement managers nowadays need a dense network of suppliers and industry contacts to ensure sustainable business performance. Connecting with peers in the procurement world helps procurement managers to maintain an overview over the market and fosters buyer-supplier relationships.

In addition, staying up to date about market developments, technological innovations and changes in rules and regulations are a crucial part of the learning process of every procurement manager’s job. Based on literature and semi-structured interviews with procurement managers, a research model was developed which was tested through an on-line survey amongst 103 procurement professionals from various industries that were active on social media.

First, the study found a direct, positive relationship of active and passive job related social media usage on procurement job performance. The direct effect of passive job related social media usage on procurement job performance is stronger than the direct effect of active social media usage.

Active Social Media

Further, the results showed that networking capabilities and individual learning fully mediate the direct positive effect of active social media, indicating that the positive effect is only present if social media is used for networking or learning activities (e.g. acquiring knowledge online by reading tweets or group discussions in procurement networks such as Procurious). Furthermore, the relationship of passive social media usage is partially mediated by networking capabilities and individual learning, suggesting that there are additional variables that still need to be investigated to explain this relationship.

The direct positive effect of networking capabilities and individual learning underlines the importance of these two activities for procurement professionals that aim to perform better than their colleagues.

The findings of this study are the first of its kind and finally proof a positive impact of job related social media usage on procurement job performance. Those insights can be crucial for procurement managers and recruiters. In a next article you will read about factors to influence job related social media usage within your company or procurement team.

Getting the Most out of Procurious in 2016

A very Happy New Year from everyone at Procurious HQ.

2016

We hope you enjoyed the festive break, survived the family Christmas and dodgy TV scheduling, managed to relax and have come back to work ready to continue the good work we kicked off in 2015.

Procurious has gone from strength-to-strength over the past 12 months, with our community growing to a fantastic 9,750 members. But the work isn’t even half done yet – we want to continue growing and get even more procurement and supply chain professionals as possible on the site.

Get the Most out of Procurious

If you’re new to the site, or have resolved to squeeze as much from Procurious as you can in the coming year, then here are a few top tips for you:

1. Complete your Profile

If you haven’t already, make sure your profile is complete and up to date. Social media profiles with a picture get around 25 per cent more interaction than those without, so add a good picture.

Make sure you complete your location, industry and category, as well as your work experience, so you can get the most from the community by connecting with people you have common interests and work with.

2. Link Your Social Media Profiles

2016 is the year for procurement to push ahead with its efforts in social media. If you have a LinkedIn, Twitter or Facebook account, link it with your profile.

Not sure where to get started with social media? Make starting this your aim for January! Procurious can help with that, and offer you and your organisation a tool to boost your brands.

3. Download the App

If you didn’t know already, Procurious is launching an app! Keep an eye out for announcements on when the app will go live, but it’s sure to be worth the wait. It’s only for iOS at the moment, but we’ll be looking to roll out a version for Android later in the year so no-one misses out.

It’ll be free to download and it means you can take Procurious with you wherever you go!

4. Find a Networking Event

January is a great time to start looking for events you can attend in the early part of the year. Check out the Procurious Events Calendar and see if there is something in your area – this is a great way to connect with fellow Procurians too.

Have we missed one? Let us know and we can add it in.

5. Start or Contribute to a Discussion

Procurious members started over 400 discussions last year, and provided an amazing 2000+ answers for these burning questions. We picked out the most popular Discussions of 2015 – you can read about them here.

If you have a burning question or want to share your thoughts, and you can’t find the question already, then take the opportunity to do this now!

6. Join a Group

Find a Group that is specifically for your category, location or job and connect. Can’t find one for you? Why not create one and invite people to join.

If you’re not sure which Groups are currently on Procurious, check out our article on getting the most out of them.

7. Top Up Your Skills

Check out the Learning hub for a huge selection of fascinating and insightful videos and podcasts. We have over 80 eLearning resources from a variety of well-known professionals, renowned thought leaders and forward thinking organisations – best of all, they are all free to download!

From an Introduction to Procurement, to the future of procurement and all the content from the Big Ideas Summit 2015, there is something for everyone.

If you think we’re missing something, let us know.

8. Write for Us!

Over the past 18 months, we have carefully crafted a selection of high-quality content for you to peruse, digest and enjoy. And while we’ve had a lot of fun doing it, we think it’s high time for you to have a shot!

Get involved with Procurious by sending us an idea for a guest blog article and you could be published on the site this year. Get all the information you need here.

That’s more than enough to keep you all busy for the first few weeks of this year! We are dedicated to developing Procurious for our members, so if you think there is something missing from the site, or something that could improve it, get in touch. We always love to hear from our members!

2015 Rewind – Best of the Blog: Being at the Table – A CPO’s Tale of Woe

Our final rewind comes courtesy of one of our guest writers and friends of Procurious, Giles Breault. The article, originally shared on LinkedIn discusses what procurement needs to do to take its seat at the table.

Being at the Table – A CPO’s tale of woe

 

Some days ago while having a business lunch the topic of “being at the table” arose. It was our client’s fervent hope that as a newly appointed CPO, (a move that presumably underlined the importance of procurement) he one day would sit as a peer at the EXCOM table contributing to the strategy, growth and performance of the business. Well, thinks I, what a wonderful place to consider the notion of being at the table, while being at a luncheon table myself. It got me to thinking of the roles and responsibilities of those at and around the table.

The Options

Of course there are those whose knowledge, experience, and position, earn them a right to 1) be at the table and direct the actions of others, but there are also others at work in this community. There are those who 2) serve the table and whose unique knowledge and skills answer the call for action from those seated. Then, there is 3) the chef whose specialised skills provide the provender for consideration, and lastly there is that which is 4) to be eaten (a role that I vaguely felt myself as having held a few times).

I further reflected on how many times I heard this same refrain from many CPOs whose pre-dominant career objective was to be recognised for contributing to the business at the highest level and ultimately report as a board level peer.  Moreover, I thought back on the many organisations I have come across where the “vital” role of procurement was often tucked way neatly in the CFO shop or Business Services shop where the chance of ever getting a seat at the executive table was remote at best.

Given the fact that procurement is now recognised as a key stakeholder in organisational performance, what is holding it back from somehow being fully accepted into the community of senior leaders? While no answer is fully sufficient in a short blog, a couple of themes have emerged over the years in our work with organisations going through their own procurement transformation.

While business knowledge and acumen are the principle differentiators between those around the EXCOM table and those not, there is something more fundamental that is separating the procurement leader from the full approbation of their business colleagues. To put it back in the frame of my table metaphor,

“You don’t belong seated if you still sound like a waiter”.

And that is the essential point.

The Prerequisites

Two major things must occur that help propel procurement organisations to the senior level of strategy. Firstly, procurement must lose the connection to purchase orders. I hear some of you shouting “Heresy!”, but what I mean is that the procurement leader has an extraordinary difficulty of representing him/herself as a strategic player when the next topic of conversation is; “What is your order placement efficiency?“ Every effort should be made not to own any portion of the operative procurement cycle.

Secondly and most importantly, is the fact that procurement organisations often make a vital error by creating a separate strategy for themselves that does not altogether align with the strategy of the business. What is more, is that the strategy is often unclear how it contributes to the business in a way that satisfies more than just the finance manager.

We often find that procurement leaders speak a different language from that of other senior business leaders. While they speak of category strategies, the business is interested in how real projects bring value to their organisations. While they speak of vendor management and control the business is seeking out how external innovations can help fuel business growth.

The Solution

We advocate two distinct approaches to these dilemmas.

Firstly, develop a strategy that links to the business and directly connects benefits generated to your internal clients. We call these the pillars of successful strategic procurement and the steps are broadly as follows:

  1. Create a procurement strategy directly linked to the company’s goals
  2. Embed the annual procurement cycle into the company business cycle
  3. Drive “Lighthouse” projects directly supporting internal business clients
  4. Pull value through by having the ability to directly influence team actions
  5. Ensure that reporting is visible to your customer and ideally conducted by an organisation other than procurement

Secondly, develop an improved process of understanding the needed innovations required by your ultimate customer and significantly improve the way innovations are sought, collected, evaluated and ultimately adopted from the supplier base. We call this call the Trading Relationship Management process, and Procurement has a natural home at the heart of it.

While there is no guarantee that armed with these dual capabilities, there will be instant recognition of procurement as a future EXCOM member. However what is certain, is that Procurement will begin to demonstrate that it is not just generating business wide savings but can show where and how that value is generated and most importantly how such benefits accrue directly to internal stakeholders. Likewise other business leaders will also recognise procurement’s role as the conduit to supplier enabled innovation. Taken together, these elevate the strategic language of the function.

I explored these ideas with my lunch guest who understood and recognised how important it was for his team to strategically transform, but like so many such discussions it had to be cut short due to pressing issues at the client’s facility (I think he had to go check how many requisitions had been placed that day).

Procurious Big Ideas Keynote #6 – How People Create Alchemy in Organisations

Sarah Trota, founder of sarahtrotaalchemy and Personnel Today HR Director of the Year 2013, provided a different viewpoint in her keynote, that of procurement’s relationship with HR.

Sarah discussed her own model for how to create ‘alchemy’ within organisations – the focus of the idea is on properly engaging with employees, ensuring they are satisfied and as a result, producing better outcomes for the business.

Watch the full keynote here.

See all the keynotes and panel discussions from the Big Ideas Summit, plus Big Ideas from our 40+ Influencers.

Like this? Join Procurious for FREE and meet like-minded procurement professionals from across the world.

2015 Rewind – Best of the Blog: Social Media – Breaking News and Misinformation

Our third revisit comes from later in the year, in the wake of the terrible events in Paris in November. Social media played a huge role in the development of the story, and we looked at the power of these platforms for good and bad reasons.

paris-peace

Social media was awash this weekend with information, news and an overwhelming outpouring of sympathy in the wake of the atrocities in Paris on Friday night.

The Procurious team would like to take this opportunity to offer our most sincere condolences and sympathies to people of Paris, and all those affected by this horrendous act of terrorism. We would also offer the same sympathies to the people of Beirut, Syria, Iraq and Egypt, who have all suffered similar attacks in recent days and weeks.

Social media has changed how the world sees events such as the ones in Paris. Breaking news, information and pictures all appear on the Internet during the events, with people uploading their first-hand accounts on the ground.

But, while social media can be a force for good, and a fantastic tool to help victims and their families, there is also a darker side, with misinformation, vitriol and rhetoric all spread in equal measure, often taking the focus away from the real story.

The Good

As the attacks in Paris unfolded on Friday night, many people turned to their phones to get an understanding of what was going on. With the news cycles taking time to unfold, social media was able to fill that gap with the headlines as they broke.

As well as providing access to the breaking news, social media accounts were being used to communicate with families and friends, to let others know that people were safe. Facebook immediately launched its “I’m Safe” button, which was first used during the Nepalese earthquake earlier this year, allowing a simple way to notify hundreds of people at once.

Not for the first time, a Twitter hashtag trended in the wake of the attacks. The #porteouverte hashtag offered a place to stay for those affected by the events, similar to the #illridewithyou hashtag, which trended in December last year following terror attacks in Sydney.

A sign of sympathy, a sign of solidarity, showcasing all the good that social media can accomplish in these situations.

The Bad

For all the good that social media can do, there is a dark side to the power that is wielded by its users. Giving everyone a voice allows for the support and sympathy, but also gives a voice to misinformation and ignorance.

For the most part, the misinformed stories that appear in the aftermath of such events are not malicious. A small story or throwaway quote can be exaggerated out of all proportion, taking on a ring of ‘truth’ as it spreads across social media.

Stories of the Eiffel Tower lights being turned off as a mark of respect (the lights are always turned off at a certain time of night) and of fires at the Calais refugee camp due to an act of retaliation (the cause is still unknown, but pictures were from a fire in November), are just some of the ‘facts’ that grew legs thanks to the virality of social media.

Where the misinformation is malicious, it can lead to hatred and prejudice being spread, and innocent people being targeted as a result. Already there have been arrests in the UK as a result of social media posts over the weekend.

Unifying Force

The power for good of social media outweighs the power for bad in most cases. The volume of news and information we all have access to means we can be better informed and more up to date on all the breaking stories. It would be a shame to see a tool that has the potential for being a conduit for social good be lost to the many, as a result of the actions of the few.

We have the responsibility to use this wealth of information appropriately, and keep our posts factual, especially when it comes to breaking news and events like Friday night (please still have your own opinions – this is part of the beauty of social media too!).

Let’s ensure that we use social media as a unifying force across the world, share quality information (and the occasional cat video…), shine a light in dark corners and allow us to create a global community. Are you in?

2015 Rewind – Best of Learning: How to Use Social Media to Win the War for Talent

We’re looking back at 2015 and the eLearning content that was added to the site during the year. 

In our second rewind, we take a look at the role of social media in the war for procurement talent. The ‘War for Talent’ has been a major topic in 2015, with organisations looking at the ways they can attract and retain the best talent.

In this video, Tania Seary talks about how procurement can leverage social media in order to reach the right audiences and attract the right people.

Although the focus here is on millennial talent, it’s sure to be useful for recruitment for any person in or new to the procurement profession.

Like this? Join Procurious for FREE and meet like-minded procurement professionals from across the world.

2015 Rewind – Best of the Blog: 3D Printing – The End of Outsourcing?

Our second blog rewind looks at the idea that 3D Printing will have a major impact on the way organisations manufacture their products and ultimately how their supply chains are set up for outsourcing.

3D Printing - The End of Outsourcing?

From golf clubs to firearms, pharmaceuticals to trainers, 3D Printing is disrupting the manufacturing process of an increasing number of products. But what are the long-term implications for the supply chain as a whole?

It’s a common misconception that 3D printing is something new. Although the processes and thinking for it have been around for a number of years, it’s taken a while for the technology to catch up and allow wider functionality and usage.

As a procurement and supply chain professional, this opens up a world of possibilities – a world of potential cost savings as a result of lower manufacturing costs and a centralised supply chain. Of course this isn’t going to happen overnight, but organisations can start to think differently.

The End Outsourced Manufacturing?

Manufacturing in particular has the potential to see a big change. The advances in 3D Printing can allow certain products to be made in house, instead of being outsourced to ‘low cost’ countries. While good news for organisations bringing more jobs back home, it doesn’t provide a rosy outlook for countries like Mexico and China, traditionally strongholds for low-cost manufacturing.

By bringing manufacturing closer to home, it also gives organisations an opportunity to reduce risk in their logistics, reduce lead-times and make savings on transportation costs. Plus, there’s the lower carbon footprint of global activities as an added bonus. This is all illustrated in this neat infographic.

3d printing supply chain infographic

In the pharmaceutical industry, manufacturers are using 3D Printing to improve medicines delivery systems for patients. Printers are being used to produce pyramid-shaped pills, which provide a more rapid drug release than cylindrical pills, and layered tablets that dissolve quicker and more efficiently.

While these processes are still in their infancy, manufacturers are hopeful that technology and science will work hand in hand, lowering production costs, enabling local production and, in the long run, reducing the end cost for patients.

Changes in the Supply Chain

Beyond enabling organisations to bring manufacturing back to a local setting, lowering logistics and transportation risks and costs and even maybe reducing globalisation as a whole, there are other impacts in the supply chain to think about.

Organisations will be able to produce prototypes of designs much faster than before and facilitate testing by being able to print on site. Organisations will also be able to print packaging materials, more tailored to certain products, as well as tools, jigs and other aids for manufacturing.

Finally, the requirement to hold inventory can be reduced by having designs for applicable products and other parts held on a hard drive, ready to be printed on demand, rather than physically stored in a warehouse.

Beware the Magic Bullet

A word of warning, though. As great as all this sounds, there are still risks and issues that need to be considered with 3D Printing.

Protection of copyright and security of patents is a big deal when all the designs are held on a hard drive that could be hacked from outside the organisation. Some organisations have taken steps to protect their intellectual property, but can you be 100 per cent sure you’re safe from cyber attack?

On the environmental side, although footprints are lowered for transportation, the need for printers to run continuously to be cost-effective means increased energy usage and costs. This would lead also to increased carbon footprints for local factories.

Finally, with greater efficiencies in the supply chain, reduced transportation requirements and potentially fewer warehouses, where does that leave the supply chain manager? If parts are going to be printed on site as required, there isn’t going to be the need for someone to manage an end-to-end process.

Best learn how to use the printers then!

Do you work in an industry that’s seen an increase in 3D Printing? Do you work with printers – have we missed any big benefits? Let us know and get involved in the discussion!