When a production company sources new factory equipment, research and development professionals must be an integral part of the procurement process.
Mechanical and electrical engineers have a clear idea of how operations will transform over the next 10 years. They possess a comprehensive understanding of machinery design, which enables them to determine which suppliers develop the most reliable and progressive implementations.
A distinct advantage
Moving past the surface-level benefits of getting R&D departments on board with materials acquisition, how can these specialists specifically contribute to sourcing endeavors? Bradford Goldense of Machine Design noted four segments of R&D, each of which brings its own insight to the table:
- Basic research involves professionals scrutinizing the market for signs of progression or needs that will arise in the near future. Basically, it consists of analysts combing certain sectors, geographies and demographics for opportunities.
- Applied research occurs when a specific goal or target has been identified. Maybe a problem in a given situation exists and there are possible ways in which it can be resolved. The goal of specialists is to find a solution.
- Advanced development transpires after a resolution to a previously defined challenge has been answered. The R&D team then deduces how that finding can be applied to existing products or processes.
- Product development consists of fine-tuning revised goods in order to make them fault-tolerant and eliminate any vulnerabilities that may exist.
As one can see, the R&D team has a comprehensive understanding of all existing solutions and where opportunities for expansion or advantages reside.
Replacing old machinery
U.S. manufacturers would do well to include R&D experts in the development of suppler relationship management strategies. IndustryWeek referenced a study conducted by Morgan Stanley, which discovered the majority of industrial machinery currently used by domestic production enterprises is at least 10 years old.
Apparently, U.S. commodity-makers aren't showing any signs of procuring new equipment, as orders fell 2.7 percent in the first half of 2014.
However, North American factories are encountering greater demand. The source referenced the RBC Canadian Manufacturing Purchasing Managers' Index, which noted that Canadian production activity increased 1.5 percent in August from July of this year. The Institute of Supply Management's metric of manufacturing health in the U.S. grew 1.9 percent over the same time period.
High production rates typically translate to a need for more equipment. Before getting ahead of themselves, businesses should conduct a thorough assessment of projected material demands. This will give them a good idea of what kind of machinery is needed and whether it will grow outdated in two years' time.