In the latest episode of MetaPod, host Ron Crabtree and guest Mike Wynn, Vice President of Advanced Purchasing Dynamics, dive into the constant learning and adaptation necessary to stay ahead in the ever-evolving world of supply chain management. Throughout their discussion, they highlight a variety of must-master skills and strategies for your sourcing team.
A fundamental aspect discussed in the episode is the importance of commodity or category knowledge. Mike emphasizes that as buyers, knowing as much about the products and services you purchase as the suppliers themselves is crucial. This depth of knowledge is not just about staying informed but also empowers better negotiations and ensures materials and services meet your production needs effectively.
For instance, if your company is buying plastic parts from an injection molder, understanding the materials used in the process, the production costs, and the capabilities of the supply base are all essential for making informed decisions. This level of understanding helps in creating a strategic approach to procurement that goes beyond just price considerations.
Effective cost management isn’t just about finding the lowest price but understanding the entire cost structure of the products and services being procured. Mike points out there are often significant savings opportunities that remain untapped because companies do not apply rigorous cost engineering principles.
Mike suggests developing cost models for procurement items can lead to better cost management and competitive pricing strategies. For executives unfamiliar with these practices, starting with the basics of asking suppliers for cost breakdowns and moving towards more detailed cost modeling is a good strategy.
Ron and Mike also highlight the importance of scenario planning as a risk management tool. With recent global disruptions, like the COVID-19 pandemic and changes in global trade dynamics, having a robust scenario planning process has become more crucial than ever. This planning involves preparing for potential disruptions by understanding the critical elements that are essential for production and identifying potential risks in the supply chain.
Mike discusses how companies can use scenario planning to prepare for a range of potential futures, which is particularly important in a globally integrated supply chain. This preparation helps companies avoid being caught off-guard by changes and ensures they can continue operations under various circumstances.
The integration of technology in supply chain management was also a significant focus of the discussion. Mike mentions the use of AI chatbots which can assist in gathering material technology information and aid in the manufacturing process. However, he notes that while these tools are helpful, they are not as effective in understanding the supply base due to the specific needs of manufacturers.
For more specialized knowledge, tapping into a network of commodity experts or using specific databases and association can be invaluable. These resources can provide the deep, niche knowledge required for effective supply chain management.
The skills discussed are invaluable to any businesses looking to remain competitive and resilient in today’s complex global supply chain landscape. If you are looking to learn more or have further questions, contact Mike by connecting with him on LinkedIn.
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