Direct Materials Sourcing Platforms: The Why and the How

MetalMiner welcomes Jason Busch, executive editor of our sister site, Spend Matters. This post is continued from Part One.

Our latest paper, A Direct Materials Guidebook – Six Key Principles for the Manufacturing Road Ahead, explores these six themes in detail as well as the broader direct materials sourcing environment today. It concludes with a snapshot of some of the direct materials platform requirements that companies will deploy in the decade to come.

Regarding technology, in addition to focusing on the business skills and process change required to drive a new level of direct materials sourcing and supplier management success, this transition requires a new system of record for direct materials and a new way of thinking about how best to support business requirements.

During this time, direct materials platforms will become as important as transactional procurement (P2P) and VMS (services procurement) systems in the coming years. These platforms will enable the following capabilities:

  • Bridging CAD/CAM/PLM systems to share design and collaboration with sourcing professionals and suppliers, at all stages of the product life-cycle
  • Creating multi-tier supplier collaboration with sourcing, quality and supplier management processes
  • Moving away from static spreadsheets to total-cost modeling tools that constantly gather and incorporate new internal, supplier and market (e.g. commodity) pricing elements through advanced sourcing approaches
  • Getting beyond rigid FX and reverse auction processes to enable a new level of flexibility, visibility and transparency through advanced sourcing approaches

The direct materials road ahead requires a rethink of systems — not just processes and talent. The best preparation is to look for potential uncertainty and have agile systems and processes in place.

If you’re looking for detail into the “why” and “how” about how this transformation is taking shape, we encourage you to download A Direct Materials Guidebook – Six Key Principles for the Manufacturing Road Ahead today.

Looking for insight beyond the analysis? Join us for a webinar on the topic on July 17 from 11am-12pm CDT.

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