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When folk singer Bob Dylan wrote the lyrics to his iconic song, “The Times They Are A-Changin,” in 1963, it’s a safe bet he wasn’t thinking of the business world. But, there might not be a better description of the rapid changes underway or on the horizon for business and procurement.
CPOs should be studying those changes to see how they can take advantage of them.
Some of the changes have received wide attention, such as increased connectivity across the supply chain, the potential of big data for predictive analysis, and the new skills and mindsets the next generation of procurement professionals will bring to the function. But there is much more. Here are two other items to consider: New methods of manufacturing. 3D printing technology, or additive manufacturing, is changing the way engineers design parts and manufacturers make them. Once used to speed up prototyping, the technology is now used to make some airplane parts and components of satellites. Essentially, it’s a system for building three-dimensional parts by laying down successive layers of liquid or powder by computer. Some say it could spell the end of the traditional factory.
Procurement executives need to work with their engineering colleagues to understand the uses of this and other breakthrough technologies so they can better evaluate suppliers and advise design teams. New paths to innovation. CPOs should be constantly looking at ways to draw out innovation from the supply chain. There may be some offbeat ways to do that. One is a version of crowd sourcing; you could call it crowd innovation. One of the companies leading the effort is called, appropriately, Quirky. It’s a type of social network for getting new ideas from a wide variety of sources.
Can crowd sourcing work for innovation? Well, it can work in software development, so why not? Jon Washington, founder of consultancy The Innovation Garage and former procurement executive at Canton, OH-based security-systems supplier Diebold, Inc., says that procurement teams need to begin thinking about the concept of crowd sourcing innovation. When helping companies improve their innovation efforts, he says, “we ask some initial questions as to how procurement teams can build their own collaboration and open-innovation networks–basically how they would approach suppliers for help in solving their business problems.” That kind of thinking is not very widespread, he intimates. “The model having the best success is education first, then adding technology such as social media and collaboration platforms.”
Once the procurement teams figure out the what, why, and how of innovation for their companies, they might be able to use a crowd sourcing platform to scale and harvest their efforts. New manufacturing technologies and new innovation platforms are among the changes that continue to make business and procurement so challenging and exciting. CPOs – and other executives – need to keep up or, as Dylan sang, they could “sink like a stone.”
This article is a piece of independent writing by a member of Procurement Leaders’ content team.
Paul Teague is US contributing editor for Procurement Leaders. He is the former editor-in-chief of Purchasing Magazine and has provided quality journalism to the US purchasing community for more than a decade.