Scottsdale, AZ—Bill Michael’s vision of supplier value falls onto continuing education for professionals in the purchasing and supply chain field. Like his peers who embrace this trade as a dynamic force, Michaels speaks about how the Chartered Institute of Procurement & Supply (CIPS) nurtures a robust knowledge base in the automotive industry. And CIPS is gaining momentum. In November 2020, Dana Incorporated announced that they had recently enrolled more than 300 of its employees in the “Procurement Academy” hosted by CIPS. Michaels, vice president of operations, talks with AMBW about how he guides purchasing teams into transforming their business strategies into lasting efficiencies.
We’re now into year one of the pandemic economy. What should managers be strategizing about in terms of team building to harness organizational strength?
Remote working is here to stay. Technology will replace much of the travel and face-to-face contact we took for granted in the past. As technology plays a more prominent role in procurement, we will require our teams to architect and integrate our supply chains through supplier selection. We must align the suppliers with our business strategy and build strong, committed, internal and external relationships. The key driver will be ‘value delivery’ over price. Managers need to ensure that the procurement team has high emotional intelligence, empathy, and well-executed influencing skills. Training around influence, presentation, and relationships will be invaluable as we manage a post-pandemic world.
What role does CIPS play in benefiting the auto care industry?
The auto care industry is currently experiencing reduced volumes, technological change, obsolescence, and complex logistics. CIPS is the dynamic champion driving the global procurement and supply management profession. We help businesses worldwide excel in procurement and supply by providing procurement assessments that enable managers to benchmark against the global standard. Our procurement services and skillset gap analysis allow our members to pinpoint critical gaps and develop plans to create high performing procurement teams leading to competitive advantage.
Certain supply chain experts are promoting an anticipatory model over a reactive kind; however, that concept seems unclear as to what that means. Explain your version.
The earthquake that hit Fukushima, Japan, in 2011 is a lesson in business disruption. Next followed severe floods in Thailand and the global pandemic.
While many organizations have supply chain risk plans, they are insufficient to accommodate significant supply chain disruptions. While reacting to risk is a common practice, some are so disruptive that they can destroy business continuity for a long time.
Old methodologies like just-in-time inventory have proven inadequate. Many professionals fall short when it comes to mapping the supply chain. Many organizations consider risk from a tier-one perspective but are unaware of the supply chain's deeper issues.
It's impossible to think that we should be chasing low-cost labor and ship from somewhere in the world to reach our markets.
Many organizations are rethinking the supply chain and looking at developing smaller facilities closer to market. Other organizations are keeping an eye on reshoring with automation in mind. Building flexible multi-channel tied exclusive supply chains and understanding all tiers will be the key to success.
What enabling technologies that support the supply chain is gaining momentum?
We now see the introduction of Artificial Intelligence (AI) and the Internet of Things (IoT). AI computers can search the internet to locate suppliers, issue requests for information (RFIs), and narrow down the supplier selection based on key criteria for final review. As these machines learn from the analysis, it continues to improve.
In the integrated supply chain, suppliers and computers' real time demands can make capacity plans and the planning process. There are drones in warehousing that can take an inventory every hour by flying in the aisles and scanning bar codes. We see fully automated robots that autonomously pick stock and load it on trucks for delivery.
Manufacturing plants are driving to a "lights out operation." Take for example FANUC, a Japanese robotics company that has been operating as a lights-out factory since 2000. The robots build other robots at a rate of about 50 per day and run unsupervised for as long as 30 days straight. We haven't seen the full impact of these technologies yet, but our procurement roles will change to strategy development and supplier relationship management.
To that end, who has gained from CIP’s best practice platform?
More than 300 organizations have worked with CIPS to evaluate and improve their procurement and supply functions. The program assesses organizational leadership strategy, policy, people, process, systems, and performance management. The change from tactical and transactional procurement to world-class strategic value creator is quite a journey for most companies. This leadership commitment requires management support, business coordination, and collaboration, strong data analytics, and funding.
