Cross-train for supply-chain success

In this installment of Automation Zone, learn how to close the knowledge gap between your engineers and your procurement professionals.

By Will Jacobsen, digital marketing associate, MRO Electric and Supply

Industrial automation equipment is a staple for any major factory or machine shop. However, consistently procuring these electronics strains many organizations. These strains can lead to higher costs, wasted man-hours, and worst of all, downtime. By training employees to forecast equipment requirements, work together, and source strategically, businesses can resolve the many issues that come with automation procurement.

Automation procurement

The efficient management and sourcing of automation equipment remains a challenge for many companies. Procuring this complex equipment is not as simple as ordering cleaning supplies or replacement hand tools. Often, there’s a dramatic knowledge gap between the engineers who are in need of the equipment and the procurement professionals who actually make the purchase. In regard to industrial electronics, the details matter. One product can look precisely similar to the next but hold substantial differences in how it functions. It’s important that managers train their employees on the best practices to procure this type of intricate equipment.

Additionally, it can be difficult for executives to grasp the overall spend that automation can represent. However, when these costs are added together, they can represent thousands to millions of dollars, depending on the size of the organization. By implementing tactical procedures and training aimed at reducing equipment purchasing inefficiencies, tremendous savings can be realized.

Collaboration

In today’s world with a global supply chain fraught with long lead times, increased logistical costs, and unprecedented volatility, it is important now more than ever before that procurement workers and engineers collaborate to achieve the most efficient resolution to a part or system going down.

Many times, engineers are left to their own devices when ordering automation products. This can create logistical and financial hassles that trained procurement professionals could easily avoid. Similar results can occur when procurement managers are left to purchase a product on their own. Oftentimes, the wrong part is requested from a supplier, or a part that was not even needed in the first place is ordered.

It is important that these two types of professionals are trained on how to work together when making procurement decisions on automation and other advanced equipment. Some organizations may even consider embedding an experienced supply chain management professional in specific business or manufacturing units, or vice versa by adding a versatile engineer to a procurement team.

Creating an educated and coordinated environment where these two fields can align and work in sync to achieve their goals is crucial to successfully seeking and acquiring replacement automation components.

Forecasting needs

Managers should train procurement and engineering employees on how to predict future automation requirements. Forecasting the needs of future automation replacements can be extremely difficult because of its low-volume, erratic nature. Decision makers should determine whether they want to pursue a predictive, preventative, or reactive strategy when ordering components. Based on this, the lifetime need for parts over a system’s life cycle can be calculated.

Additionally, supply chain managers and systems engineers can use this information to determine how many spare components a system should have on hand in order to avoid any downtime. Engineers and supply management teams working in sync to predict the requirements of future resources can prevent many crises.

Oftentimes large global companies use sophisticated software and systems to forecast demand. However for smaller manufacturers, simpler techniques can be used to forecast supply needs such as moving averages and exponential smoothing. These techniques can be used to account for the seasonality often accompanies automation procurement. Organized storerooms can also be used with systems in place to alert managers when critical parts are running low on stock. Remember that forecasting is a continuous process that should always be measured and improved upon.

Strategic sourcing

Managers should also ensure that their employees are properly educated on how to strategically source industrial electronic products. Reducing equipment costs and producing value starts with finding the right suppliers. An efficient supply chain management process requires suppliers that are reliable. Managers should train employees on how to find the right supplier to prevent unforeseen supply issues from occurring. This is especially important when dealing with automation equipment, which can break down suddenly as well as become obsolete.

Training employees to identify relationships with trusted vendors who can reliably manage needs can solve many of these externalities. For one, it allows for quick resolution of problems, and lessens the administrative hassles of managing payments and purchases to and from the supplier. Suppliers are more likely to give favorable payment terms to dedicated buyers, which can further improve a plant’s cash cycle. These strategic partnerships help drive cost reductions through volume.

Furthermore, procurement managers who forecast their needs should consider using their model when negotiating volume discounts. Relationship-building also allows for the development of goals that both suppliers and buyers can work towards to bring value to the other. Innovative suppliers can often help identify areas of improvement in the manufacturer’s own equipment requirements and processes. When educating employees on sourcing complex products, relationship development and strategic partnerships are necessary elements.

Overall, it is vital that employees, especially engineers and procurement managers, are cross-trained and given standard operating procedures on how to work together when advanced electronic automation equipment is needed. Strategically employing workplace education that keeps all stakeholders involved in automation procurement informed of these best practices is critical to safeguarding against system downtime and eliminating wasteful spending.

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