Technology is changing the procurement landscape. Are you ready?
Technology is a disruptive force, but manufacturing software solutions can ease the transition from one technological era into another.
Consider the changes happening throughout the procurement field. Technological advancements, such as the Internet of Things (IoT), cloud’s ability to enable the use of big data, and much more are all changing the procurement field. Manufacturing software solutions can make those changes much easier to integrate into your overall systems.
The world of procurement is undergoing a seismic shift, a radical change from what it was to what it will be. To get ready, let’s take a look at what is happening in the industry.
The Internet of Things (IoT)
The Internet of Things (IoT) refers to the ability to add internet-linked devices to vehicles, pallets, and other objects. Data can be sent from the object to the internet and through a central resource such as your ERP system. Companies transporting perishable materials such as ingredients, chemicals, or other materials may use the IoT to monitor temperature fluctuations during transport. Companies who use geo-targeting get up to the minute information on the location of raw materials or customer orders. As the IoT grows, more data added to a company’s system lends itself to more reports, better analytics, and additional insights that can lead to profitable businesses. A business intelligence system may be necessary to utilize the amount of data flowing into a company, but it’s an investment in manufacturing software solutions that pays off in the ability to visualize data and use it for better business decisions.
Leveraging Big Data
The IoT feeds a great deal of data into your system, but data also flows from many other points. Warehouse inventory, supply chain analytics, production runs, sales CRM systems, and more provide constant data for your system.
To adequately leverage such data, you may need a data warehouse that will “talk” to all of the systems. Sage Business Intelligence can then turn that data into useful analytics and visualizations that will help you make better, faster decisions.
When your procurement area can access additional data, they can make better decisions, too. Evaluating suppliers, extending payment terms, and renegotiating credit with vendors can happen with better data. Big data is rapidly expanding the role of procurement and changing how it interacts with other departments such as accounting, finance, and sales.
Procurement Moves from Back Office to Front of the House
Procurement used to have a back-office role finding vendors, securing terms, and helping with tasks such as these behind the scenes. That’s all changed. Companies today rely upon procurement to find the lowest cost and best quality raw goods and materials; procurement is now an integral part of the sales process.
Manufacturers who recognize that procurement is now a “front of the house” venture rather than a back-office function and treat the procurement department as an integral part of the process will embrace the transformation taking place. The transformation seen today gets to the heart of procurement’s role in the big picture of the business, and the way in which a sound, well-managed procurement department, fueled by data and analytics, can add to a business’s bottom line.
IWI Consulting Group
IWI Consulting Group offers manufacturing software solutions that help businesses gain insights into their operations, inventory, and profitability. We provide software and support for a wide range of industries throughout Canada. For more information, please visit IWI Consulting Group or contact us today.