There are two primary challenges global production companies are currently facing. First, organizations previously considered to be original equipment manufacturers have transitioned away from the fabrication process to focus more on assembly. Secondly, attracting new employees to fill factory positions and engineering jobs is becoming quite a challenge.
In order to mitigate these issues, many businesses are taking advantage of supplier relationship management and vendor resource management. While the latter solution assists companies looking to secure and administrate staffing requirements, the former helps organizations connect with other enterprises that can provide them with materials essential to the users' operations.
Setting targets, hitting the bull's eye
Procuring a large number of goods from numerous different companies requires accuracy and efficiency. Aside from the practical aspects of such transactions, it's imperative for the business acquiring materials to know how they were made, where they were sourced from and the best practices of the enterprise selling the products. According to Paul Ericksen, a contributor to IndustryWeek, more organizations are paying attention to the procurement process now than in the past.
Traditionally, OEMs are purchasing more finished materials now then they were half a century ago, primarily because of their transition from fabrication to assembly. Essentially, this means that supplier operations are now the greater part of an OEM's extended enterprise - and this is forcing executives to consider the practices of the entities at the very beginning of the distribution chain.
For example, say a manufacturer began producing every car wheel component in its factories. Then, after deciding to strictly compose the product as opposed to making the lug nuts, rims and tires, it would simply assemble them. In order to make sure such units are properly fabricated, the wheel-maker should weigh the pros and cons of outsourcing to a company providing e-procurement.
Garnering future workers
According to USA Today, United States production companies are finding it difficult to garner fresh interest in manufacturing. As a temporary fix, many of them are turning to vendor resource management to help them fill positions, but executives are still wary of the fact that many young people don't find the prospect of working in a factory to be appealing.
The country's manufacturers have taken a technological approach to producing goods, a factor they hope will attract new workers. Automated technology has sparked a need not for assemblymen, but for engineers, computer programs, machinists and designers. If manufacturers can't find the talent in high schools or colleges, they'll have to continue to use vendor resource management.