What the future holds
We started this book by exploring our changing world and environment and how this is driving a dramatic change in what organizations need from the supply base. Chapter 1 closed by suggesting five future needs here: clarity regarding those suppliers who are most important; confidence like never before in our supplier's capabilities and to ensure that we are not exposed to unacceptable risk; closeness with those suppliers that are important; contribution from the important suppliers to help us achieve our goals; and collaboration with the critical few suppliers who can make a difference to our business.
SRM, if well executed, provides the vital framework to realize all these things and it is possibly one of the key future enablers of success for any company that seeks to claim and retain competitive edge. None of us can be certain what the future holds, but we can make sound predictions based upon what is happening today and these can help us prepare for what we need to do tomorrow.
Our future modern lives will demand innovation across technological boundaries and that will connect industries and practices that sit separate today. Companies with a core competency in one area will find themselves needing to acquire and connect with new core competencies in another and will turn to the supply base to help. The minute, electronic, wireless revolution means medicine bottles will become intelligent and message our phones to remind us to take a tablet, Intelligent refrigerators will update our shopping list as things run out. 'Things' will become the biggest users of the internet (Valéry, 2013). Today we carry computers, smartphones with many times the computing power of the space shuttle; tomorrow those computers will be many times more powerful, better connected and we will wear them like spectacles; intelligent and interacting on our behalf with the world around us in ways we have not yet considered. Our cars, pets, clothing, medical implants, toys and tools will all have their own digital intelligence and interact with us and sources of information via the internet.
Globalization; yes, but localization and personalization too. Our suppliers could exist anywhere in the world but interact with us as if they are just next door and they may not ever need to ship anything, but rather transmit a design for us to print using 3D printing technology. 3D printing will also transform the assembly line creating parts with fully integrated electronics and will equip niche providers with a never before had tool to realize whatever they dream up whenever they want. Innovation from the supply base may not be about making or shipping things but connecting ideas with where they will be turned into reality.
Advances in technology at an ever-increasing pace will keep changing the game. Cars will drive themselves, powered using technology not yet perfected and may even be created where we least expect it. Perhaps the next global car brand will be Chinese. The same revolution will transform logistics.
Medicine is set for a revolution too when smart nano particles will be available to enter our bodies, like tiny microscopic submarines travelling through the human body on the hunt for specific cells or damaged tissues ready to change state or release chemicals when they find them - precisely where needed to deliver highly precise healing. It won't just be advancements made in laboratories of global corporations that drive progress, but brilliant minds, somewhere in the world, somehow connected together to achieve common goal. In the same way that a talented teenage musician can now write, record and release a song to the global market from his bedroom and become an overnight success, small companies with the hunger and a unique and desirable offering will be better placed to become successful without the need for any significant overheads; somewhere out there may lie a brilliant contributor. The ability to find and nurture innovation externally to a business will become an important part of purchasing's role; engaging individuals and companies more as collaborators than traditional suppliers with a relationship and commercial model to suit.
There is one certainty and that is that what happens in the world will continue to be unpredictable and perhaps volatile. Unprecedented global demand will transform the way we view security of water, food and other commodities. Understanding and actively managing supplier and supply chain risk will move from something only a few alert companies do to a core role of the purchasing function. It doesn't end there but rather the future role of purchasing will be to drive strategic responses to risk and pursue new sourcing strategies that shore up future supply, building new types of relationships with key providers to do so.
As our demands and preferences, and 'better, faster and just for you' is where the game is at it is the providers who are agile and flexible enough to respond quickly and to whatever whim a customer might have that will do well. Purchasing will help create this agility with thorough effective management and incentivization of the important suppliers.
There is a certain energy and hopefulness about reflecting on how the future is shaping up, and I could fill an entire book speculating about what might happen and how purchasing might need to respond. There is no doubt there are some exciting things that will shape our future lives, but no matter which area of human progression we consider there is one common theme emerging and that is that we can't leave all this to chance. An arm's length supply base may continue to be good commercial practice for many, but not all. If we view our suppliers passively as just 'suppliers' responding to demand we determine then we could be left behind; sat on the sidelines watching as the world around us changes. Many suppliers now need to be regarded as 'enablers' or 'innovators', 'connectors' or 'assurers', operating within a new type relationship and commercial framework that encourages them to share brilliance with us. We need new skills, new mindsets, new outlooks; to shift focus to what is important; to link supply base intervention to corporate objectives; to understand where in our supply base we need to focus our effort, all according to the current and future needs of the business and the environment it sits in.
SRM has a pivotal role to play here because what we need for the future; the brilliance that will carry an organization forward may not necessarily reside within that organization, some of it might, some of it may be unobtainable in the traditional employed resource model but might exist somewhere on the planet.