Industry 4.0 means procurement ‘will be seen more strategically’

29 November 2018

The spread of Industry 4.0 means the procurement function will be seen more strategically in organisations, according to a CIPS working group. 

A working group of up-and-coming talent from the Aerospace and Defence Procurement Group has recently carried out an in-depth piece of research on what Industry 4.0 means for procurement in their sector.

Industry 4.0 is the name given to automation and data being used in manufacturing processes and technologies, encompassing the internet of things, cloud computing and cognitive computing among others. It is also commonly referred to as the fourth industrial revolution.

Presenting the group’s findings at the CIPS Professional Services Annual Event, hosted by law firm Clifford Chance, Maja Molloy, strategic sourcing graduate at Cobham, said: “We can find fully integrated ways of solving problems to allow us to develop new ideas, making everything more informed and strategic.”

She added that some technologies, such as using simulation, had been used in aerospace and defence for some time, but now manufacturing was using tools like autonomous robots and AI. “AI can look for defects, scan and continuously learn,” she said.

Additive manufacturing ­– 3D printing – is also being used, with Boeing recently producing its largest 3D-printed component. 

“[3D printing] pushes the boundaries for what you can do and make,” said Molloy. “It’s faster and cheaper to prototype, and to make bespoke new products. It will become prevalent in low volume, high variety components.”

Michaela Bousfield, supply chain development manager at Leonardo, cited research from Hackett Group which found 84% of procurement professionals believe industry 4.0 will change the way their services are delivered in the next two to four years.

“It will allow us to make decisions faster, with data in the cloud enhancing our ability to manage supply chains,” she added.

Industry 4.0 will also affect what procurement people buy – perhaps purchasing polymer for 3D printing over steel – and how and when they buy it, with the internet of things allowing for automatic ‘smart’ ordering.

“Our function will be seen much more strategically: it has to be,” said Bousfield. “[It will be about] the partners we work with, making sure we are aligned. It’s looking more at collaboration rather than being adversarial.” 

In aerospace and defence, a big barrier to Industry 4.0 going mainstream is cyber security risk, as it requires sharing of data.

Bousfield added that another challenge was company culture. “It’s getting us to change the culture, rather than just sticking with what we know,” she said. “This is a risk averse industry. But all companies will need to invest in these technologies as a means of survival.”

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