4 Key Features of Procurement in Industry 4.0

Jul 6, 2022 | Procurement in manufacturing industries

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Jul 6, 20222 min read

In Industry 4.0, procurement plays a crucial role with advanced technologies like AI, IoT, and big data driving procurement towards efficiency and cost savings. Key elements include data analytics, automation, collaboration, communication, and sustainability. Procurement professionals' role is becoming more strategic and critical in the fourth industrial revolution.

Procurement in Industry 4.0 refers to the process of acquiring goods and services in the context of the fourth industrial revolution. Industry 4.0, also known as the Industrial Internet of Things (IIoT), is characterized by the integration of advanced technologies such as artificial intelligence, the internet of things, and big data into manufacturing and industrial processes. 

In Industry 4.0, procurement plays a crucial role in ensuring the smooth functioning of manufacturing and industrial processes. With the integration of advanced technologies, procurement becomes more data-driven and automated, allowing for greater efficiency and cost savings. 

One of the key ways in which procurement contributes to Industry 4.0 is through the use of data analytics. By analyzing large amounts of data from various sources, procurement professionals can gain valuable insights into supplier performance, market trends, and consumer behavior. This information can then be used to make more informed decisions about which goods and services to purchase and at what price. 

Another important aspect of procurement in Industry 4.0 is the use of automation and digitalization. In the past, procurement processes were often manual and time-consuming, but with the advent of Industry 4.0, many of these processes can now be automated. For example, the use of electronic purchase orders and invoicing can greatly streamline the purchasing process, resulting in faster and more efficient transactions. 

Procurement in Industry 4.0 is also characterized by increased collaboration and communication between suppliers and manufacturers. With the use of advanced technologies such as the internet of things, suppliers and manufacturers can share real-time data and collaborate on production schedules and inventory management. This enables them to respond quickly to changes in demand and optimize their operations to meet the needs of the market. 

Another important aspect of procurement in Industry 4.0 is sustainability. As industries are becoming more aware of the impact of their operations on the environment, procurement professionals are increasingly looking for ways to source goods and services that are sustainable and eco-friendly. This includes looking for suppliers that use renewable energy, have a low carbon footprint, and use sustainable materials. 

In conclusion, procurement plays a vital role in Industry 4.0 by providing the goods and services needed to enable the efficient functioning of manufacturing and industrial processes. With the integration of advanced technologies such as data analytics, automation, digitalization, and IoT, procurement becomes more data-driven, efficient, and sustainable, allowing for cost savings and optimization of operations. With the rise of Industry 4.0, the role of procurement professionals is becoming more strategic and critical. 

At FactWise, our flagship product is an end-to-end procurement solution for global product manufacturing Small and Mid-Sized Enterprises (SMEs), an overlooked customer segment. We are on a mission to disrupt the procurement industry with our comprehensive, Source-to-Pay SaaS solution that streamlines our clients' complex, specialized procurement procedures, giving them sustainable, positive business impact.   

About the Author

Stawan is the founder and CEO of FactWise. Before founding FactWise, Stawan was the NA TMT-Procurement Leader at McKinsey. Passionate about procurement, Stawan has 15 years’ experience in enabling clients of all sizes to achieve business impact via procurement.


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