5 Ways Manufacturing Companies Can Use Technology to Source Materials

If you’re a manufacturer that requires materials to produce products, one of the most critical aspects of your business is securing a reliable supply of materials.

During the good old days, it was relatively simple to pick up the phone and speak to a supplier. But things are not as cut-and-dried now — which can be an issue if you need a supplier offering a dependable supply of materials at a fair price. You also need to factor into the equation geopolitical events that can disrupt access to materials.

One of the most obvious trends emerging in the materials sourcing space is the development of the digital market. The digital market provides manufacturers with a direct link to suppliers globally — giving unprecedented access to all materials, components, and raw materials.

Consider these five technological developments that are influencing material sourcing.

1. The Emergence of E-Markets

It’s important to consider marketplaces or platforms that provide material sourcing services to producers.

Producers are connected to a global supply chain network, and this potentially makes it easier and more viable to acquire materials that may or may not otherwise be readily accessible or may be costly to acquire or produce. The producers are now able to compare prices, quality, and timelines with suppliers.

It can, however, be certain what options are the most viable. That’s one reason it makes sense to connect with an industrial materials broker that can connect your company with dependable suppliers offering reliable supplies of the materials you need. Otherwise, you might find yourself in a time- and money-wasting hit-or-miss cycle. You’ll avoid unnecessary stress by connecting with a broker in the industrial materials space.

2. Artificial Intelligence Optimizes Supplier Selection

Artificial intelligence can be a useful tool for a company sourcing or procuring materials. Rather than relying on intuition or manual analysis, AI can analyze large amounts of supplier information in a matter of seconds.

Suppliers can be assessed by AI using parameters related to past performance, delivery, quality, price, and even viability. Your company can even use AI to foresee any risks by tracking trends related to various events around the world.

Specifically, manufacturers could be warned by an AI system about political instability or environmental factors that could hinder the supply of necessary materials.

3. Blockchain Technology Provides Traceability and Transparency

Modern manufacturers are increasingly being pressed to demonstrate a higher degree of ethics regarding material sourcing and the environment, and blockchain technology has emerged as a crucial solution to this problem.

Essentially, the blockchain is an uneditable electronic ledger that records transactions in a way that can’t be reversed or altered. When this technology is applied to material sourcing, tracing can now be achieved from one end — raw material harvesting — to the other end — delivery. Industries that prioritize quality controls or safety regulations can use blockchain technology to guarantee accountability throughout the supply chain.

4. The Cloud-Based Procurement System Increases Efficiency

The integration of cloud technology has brought significant changes to the sourcing and procurement processes. Material sourcing typically involves various departments, and documentation, as well as communication channels, could complicate the process.

However, cloud technology can, when leveraged properly, remove all barriers.

5. Predictive Analytics Prevents Supply Chain Disruptions

Predictive analytics offer a glimpse into the future — so to speak. It’ll make it easier to predict shortages, market price changes, delivery delays, and more.

Some companies are utilizing predictive technology to effectively manage their inventory levels. Based on their predictive knowledge, they can prevent both overstocking and understocking their inventory, leading to efficient utilization of storage space and capital.

Technology can help manufacturers get the materials they need. E-marketplaces, artificial intelligence, blockchain, collaboration technology, and predictive analytics are all making material sourcing easier by providing access to suppliers worldwide.

All these technological capabilities are significantly changing the face of the procurement process. Manufacturers that use this technology will have a competitive advantage.