Today’s manufacturing climate is more volatile than ever. Uncertainty is at a record peak; and there are increased pressures on manufacturers to remain profitable while navigating a new era of political change and complying with complex regulations. According to KPMG’s Global Manufacturing Outlook, 74% of manufacturers say that growth will be a high priority over the next 2 years. In the UK, despite manufacturing being in greater demand than ever due to a weaker pound and an increase in global demand, many manufacturers have struggled to adapt and keep up.

As such, manufacturers are quickly understanding that to achieve growth in this climate, they can’t go it alone. Manufacturers need to build a partner ecosystem that will help to accelerate innovation, embrace digital technology and improve collaboration with suppliers.

This is where Procurement can play a vital role. Procurement is well placed to meet these challenges head on and enable manufacturers to untap the hidden potential of their supply chains. It can also provide manufacturers the flexibility to quickly add new suppliers and change business processes on a dime, improving speed to market and overall agility to react to a rapidly changing market.

Effective collaboration is key

Some manufacturers still see their supplier relationships as transactional. However, with manufacturers hunting for growth, suppliers can be a vital component for success when managed properly. To gain the most value from partnerships, manufacturers need to nurture their relationships and work together to meet the goals of the business.

Of course, the greater dependency involved in such tight-knit relationships can increase risk and the impact of a failure within the supply chain. However, Procurement can mitigate the risks of such collaboration through diligent monitoring of risk and performance, taking preventative action when required.

Procurement can become a gateway to help increase collaboration with partners, giving suppliers the ability to adapt quickly, make faster decisions and align objectives as and when they change or develop. By working together to the same end, supply chain partners become consultative allies, helping to grow the businesses to the benefit of both parties. This stronger relationship allows manufacturers to collaborate with their suppliers quickly and efficiently, developing proactive relationships where risk management is included at the heart of their interactions, so executives aren’t caught surprised by changes in the manufacturing environment.

Getting ahead of the pack

Managing the supply chain isn’t just about efficiency and risk management; manufacturers need to be releasing innovation from their suppliers to remain competitive.

Market leaders realise that they cannot rely solely on internal innovation, and without increased collaboration within the supply chain, it could be difficult for manufacturers to invest and get to that “next level” of innovation and growth that many are pursuing. The supply base is a vital component of success and should be used when bringing new products and capabilities, that can keep the organisation competitive, to the table. Besides innovating in existing markets, suppliers can offer great insights into local customer tastes when entering new markets.

The power of data

Digitisation offers the potential for game-changing impact for the manufacturing industry, transforming the way industry leaders are building intelligent products in digital factories enhanced by connected ecosystems. All of this will generate a colossal amount of data, providing insights to a level never thought possible before.

In fact, by working with supply chain partners across distributed locations with a wide range of items in production, manufacturers are already sitting on a gold mine of data that can be drawn from, which can give vital information on how to improve processes and increase productivity. However, the challenge is seeing all this data together and in a timely and consumable fashion, and in a format that allows for easy analysis while offering visibility to key stakeholders.

Using technologies like natural language processing (NLP) and Artificial Intelligence (AI) to analyse data and mine insights from users, suppliers and production, Procurement can collate this data into a single hub, giving manufacturers the ability to access a complete picture of the supply chain. This platform will also be able to cross-reference this data with the latest financial, risk, compliance, political and geographical insights by effective integration with external data sources.

Armed with this data, manufacturers can be smarter about their procurement decisions – increasing efficiency, reducing risk and boosting performance. Advanced iterations offer the potential to create reliable forecasts for future risks and opportunities.

Partnering with Procurement for a better future

In a world of constant uncertainty and risk, manufacturers must face the challenge of maintaining an efficient organisation while constantly assessing new areas of risk and opportunity. Procurement can play a vital role in helping manufacturers meet today’s challenges head on. It enables manufacturers to have the visibility, flexibility and insight needed to spark innovation through suppliers, use data to drive insights and automate processes, and foster collaboration to create closer working relationships.