Our organisation often talks about the misalignment we see between Procurement and Engineering, and in our work, we urge our customers to clarify business goals, align KPIs, and collaborate. Too often we find that departments focus on their own objectives, rather than common business objectives.
The cliché is that in the search for the cheapest basket price, Procurement teams don’t invest as much time around added value services, and the knowledge and innovation suppliers can provide through Engineering support. Meanwhile, the Engineering team want to use whoever they want because they know the right product for the application and know where best to get it, no matter what the consequences of using more suppliers. As a result, Procurement professionals we meet can often find it difficult to get full support from their Engineering colleagues. Whilst these are just clichés, it happens more regularly than we would like. That is until now!
As we look to the future, and explore the challenges facing the Engineering sector, it’s easy to get disheartened. A globally competitive environment, challenges attracting new talent to bridge the skills gap, constant cost down pressure, the need to pivot to new growth sectors, and the concern that competitors are increasingly streamlining their business through the adoption of Industry 4.0 practices. These challenges require a future view and are bigger than most businesses can face alone. So, where to start… well I’m not sure I’d start from where many are now!
Many customers our MSC engineers visit are not thinking about the future challenges the industry and their business face, these companies understandably prioritise getting product out the door. But for those business owners, the challenges are real, and so this is the time to make the case to consolidate consumable suppliers, not primarily to get better pricing but to enable big change in their business. Engineering businesses will get better, more consistent data by working with fewer suppliers who are transparent and share information and insight. This means a significant change in approach, as too often Engineering businesses select a range of suppliers and brands based on a historic relationship, and typical conversations are around the latest tool or speeds and feeds. Whilst there is a place for that, this focuses on today’s production and often promotes supplier proliferation, it fragments data and makes business wide change harder to implement.
A further reason for consolidation is that most businesses need support and a road map of the steps to take on this journey, but most consumables suppliers don’t have the knowledge, skills or third-party partnerships to help put the foundations in place. Being able to collaborate with one partner who has experience, partnerships and access to good data makes the process easier.
The thing is, as we look forward towards a data driven, smart, autonomous engineering sector, consolidating to one supplier makes the transition easier for a business. The outcomes will transform a business:
- Increased machine utilisation
- Higher productivity
- Lower overheads
- Reduced capital expenditure
- Better planned material supply chain
- Faster speed to market