Whilst new technologies continue to transform ecommerce, bricks and mortar, global delivery and postal returns, procurement and supply chain management has until now remained relatively unchanged – writes Gus Bartholomew, who suggests what the future of manufacturer sourcing might look like …
For furniture and interiors brands looking to be a step ahead in an increasingly competitive and volatile marketplace, the future of sourcing will have to look very different. Better supplier collaboration and adoption of new supply chain technologies will enable brands to find the best factories and build faster, leaner, more flexible and more transparent supply chains.
Digitisation
As consultant McKinsey said in a recent report, digitisation is the next sourcing country. Brands will have to find other ways to cut costs in their supply chain beyond squeezing suppliers and manufacturers on prices. To remain competitive and to make better margins, digitising the supply chain is key – and that entails looking for end-to-end software solutions that will help bring greater visibility, traceability, transparency and planning to sourcing.
Strategic country selection
Whilst cost of labour has traditionally been one of the key drivers for manufacturing location, as living wages between countries level out, this will increasingly become a less important factor.
With the change in consumer expectations, furniture and interiors brands will be much more driven by speed of delivery, value (quality/price) and compliance. As consumers become more clued up on how products are made, and the value of having product made by a skilled workforce, and the carbon footprint of their products, it is likely that we will see more product produced closer to where the raw material is grown and where the specialist workforces live.
Social and environmental impact
It no longer suffices for a brand’s social and environmental impact to be an add-on, or an empty marketing campaign driven by the CSR department. There has been a monumental shift in consumer mindset over the past few years that means sourcing and taking responsibly is a necessity and no longer a point of difference.
The decision to source more responsibly needs to have buy-in from all key decision makers within an organisation. Making more sustainable and ethical decisions needs to be front of mind throughout, from supplier selection and design through to production development, production and delivery.
Trust and better supplier collaboration
Even in the digital age, personal relationships are key. The key to having an efficient and robust supply chain is to pick the right partners and invest time and money in building long-term strategic partnerships with them.
There needs to be a shift in mindset – not just from sourcing teams, but from manufacturers too, in order to survive in the future. Manufacturers need to understand that the model is shifting from a demand-based one more to a consumer-driven one. Those who are agile and keen to adapt will be the winners. The manufacturers and brands who invest in modernising their supply chains will prosper the most.
3D virtual protoyping
The one area within the supply chain which is full of avoidable mistakes, delays and unforeseen costs is the sampling process. Design development is still to this day largely manual, despite the advances that have gone on within technology.
Within the furniture world, 3D modelling software is excellent for communicating designs to manufacturers, but other industries have been slower to catch up. Advances are starting to be made within the fashion world in particular, where companies like Optitex have developed 3D virtual prototyping software. Real-time visualisation of designs saves time and money and reduces the amount of back-and-forth between brands and manufacturers.
3D manufacturing
There has been a buzz around 3D for several years but, as solutions become more accessible and affordable, it has become a very real possibility for certain furniture brands as their production method of the future.
As consumers demand more customisation and expect products to be delivered quicker, it will no doubt be an increasingly popular option for furniture brands. Products can be designed to suit the demands of the customer and printed locally, which avoids the high costs and delays associated with sourcing overseas.
There will be a paradigm shift within procurement in the future. Procurement decisions will play a more important role in the operations of organisations, and cloud-based supply chain solutions will take centre stage. In the future, supplier selection, design development, communication, payments, tracking and compliance will happen online, enabling real-time collaboration, greater visibility and a more streamlined procurement process.
Gus Bartholomew is the co-founder of Supplycompass, a tech-enabled, end-to-end production management platform for brands that want to find and work with international manufacturers. Brands can create tech packs, get matched with a manufacturer and use the platform to manage production from design to delivery, responsibly and sustainably.
