TM quizzes Andrew Coulcher, director of business solutions at the Chartered Institute of Purchasing & Supply (CIPS), about the member-led organisation and the supply chains trends currently impacting global manufacturing companies.
Who is CIPS and what role does it play?
Head quartered in the UK, CIPS is celebrating its 80th birthday this year. We are the world’s largest procurement and supply management professional organisation, involved with bespoke training up to and including degree level. We support businesses and organisations of all sizes and sectors and work with governments all over the world. We have a membership of 66,000 worldwide, additional offices in South Africa, Melbourne in Australia, the Middle East and are opening up in China and India this year.
What training do you provide?
At the lowest level we provide skills training to help improve negotiation right up to master classes for senior practitioners and everything in between. The offering we provide to corporate companies tends to be tailored to their particular business needs. We deliver underpinning knowledge for procurement and supply chain work and offer training tailored to the specific industry the business operates within.
Where does the PMI sit within your offering?
A big part of what we do as a professional body is to represent the interests of our members as the voice of procurement and supply. This is why we helped create the PMIs alongside Markit, the financial information services company. We started with manufacturing in 1991. Purchasing managers are at the heart of business and the PMIs represent a cross section of industry, with the ability to tell exactly what is happening with business activity on the ground. The PMIs have developed to become one of the first monthly indicators of what is happening in the private sector economy and have consistently proven themselves to be accurate and timely, appearing well ahead of comparable data produced by government bodies.
“The PMIs have developed to become one of the first monthly indicators of what is happening in the private sector economy” – Mr Coulcher
Have you noticed any particular supply chain trends emerging recently?
Lately there has been a tendency for a greater level of dual sourcing. It used to be quite common to concentrate manufacturing capacity in the Far East but events like the Tsunami and the Ash Cloud have revealed how vulnerable companies are to geological events. There are increasing numbers of companies looking at local sourcing or nearer sourcing, sometimes as a way of topping up capacity but also as a deliberate way to dual source products to mitigate risk and ensure business continuity. Organisations are also considering due diligence issues and digging deeper into supply chains than they may have before. Quite often the risk to supply is not in direct or tier one suppliers but a lot further down the chain where risk mitigation strategies are equally crucial.
Is China still the primary low cost manufacturing economy?
We have seen a shift in the centre of gravity for a lot of manufacturers. While China was the place to be, we’re now starting to see countries like Brazil, Malaysia, The Philippines and Vietnam raising the profile of their capabilities. Companies now have to be much more agile in terms of deciding where to find the best place to source. What this means is that businesses need to have staff who are not only procurement and supply professionals but also understand the impact of moving supply chains around the world and managing very complex, long-reach supply chains. In addition, we are also starting to see a levelling off in the cost advantage of using Far-Eastern manufacturers. The big challenge that UK manufacturers still face is that places like China can deliver great flexibility thanks to the speed in which they can increase their headcount almost overnight. In fact countries like China are now becoming the creative, innovative force of the future.
For more information visit www.cips.org