Feb 11, 2016

With Industry 4.0, the procurement engineer is now the man or woman of the hour, says our guest blogger, Prof. Dr. Michael Henke, Head of the Fraunhofer Institute for Material Flow and Logistics.

It’s no great secret that procurement engineers are in high demand. To meet the sophisticated needs of the modern supply chain, especially in manufacturing, you need expertise in both technology and procurement.

Unfortunately, that means different things to different people. While many companies on one end of the spectrum are hiring more procurement engineers, companies on the opposite end of the spectrum are asking questions such as: “Engineers for procurement? Hard to find. That’s why our purchasers are gaining the necessary technical knowledge themselves.” When asked how they go about doing this, the buyers in question often comment: “We just make fools of ourselves in front of the suppliers until we finally learn how to use the technology.” This might be their preferred method, but it is hardly procurement engineering.

Even though there are many buyers who have been able to acquire an impressive amount of technical knowledge over the years, procurement engineering is more than being a buyer with technical skills; it is two things:

  • a clearly defined career with a specific profile,
  • the unavoidable consequence of Industry 4.0.

Allow me to explain more about Industry 4.0. This new industrial revolution is bringing in a wave of decentralization and taking autonomy to a new level. It is also changing the interplay between human and machine. It would be a bold, and somewhat outdated, assumption to think that none of these developments will affect purchasing.

In reality, these developments are having an immediate and direct effect on Purchasing, Supply Management, and Supply Chain Management. Crucially, they are forcing procurement to adapt if it wants to keep up. The technological forces of Industry 4.0 are powering the modern supply chain.

It is now unavoidable in technical manufacturing: the procurement engineer is the future of purchasing. In fact, the purchasing engineer has achieved this status already. Ever since suppliers have become system suppliers, begun delivering modules rather than individual parts, and become integrated into the innovation and development activities of their customers, this has become clear: companies along the supply chain need project and discussion leaders who understand subject matter from both commercial and technical perspectives. These leaders should know both perspectives like the back of their hand and move them forward, and they should be able to speak the language of both engineers and managers. This is, in essence, what a procurement engineer is responsible for.

That said, the procurement engineer is not the unique phenomenon of a new age. Rather, the procurement engineer is simply a product of the powerful convergence of management and technology. At Fraunhofer IML and at the chair of Corporate Logistics at the Technical University of Dortmund, we are pushing this convergence forward.  We are one of the leading international research institutions in the field of supply chain management, and we enhance technological excellence by combining it with the corresponding management competence.

So far, there has not been a specific academic training program for procurement engineers that has been widely acknowledged or recognized in practice. Neither are there satisfactory opportunities for in-house training at companies. This opens up a wide field of operation for the combined efforts of corporate leadership, organization and personnel development, procurement and Engineering, supported by research and theory. This field must bear fruit soon, because Industry 4.0 will not wait.

 Tags: Talent

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