Procurement can become a pioneer for Industry 4.0

Dr. Axel T. Schulte, Head of Department at Fraunhofer IML

Digitalisation, the development of autonomy and individualisation as the basic principles of Industry 4.0 do not only have impact on value creation, production and logistics but also consequences for the field of procurement. The latter can even become pioneer for Industry 4.0. Science and business in Germany already took respective initiatives.  Dr. Axel T. Schulte, expert for “Procurement 4.0” at Fraunhofer IML, explains why it is so important just now to knock procurement into shape for digi-talisation.


In the fields of production and logistics, for example, the topics of Production 4.0 and Logistics 4.0 have already been a focus of discussion for several years. The field of procurement, on the other hand, is barely ever mentioned in such discussions. However, the changes through digitalisation concern all corporate functions. Procurement departments play yet a fundamental role. For they are responsible for bringing the right technologies to their company. In this context, they need to establish a base of technological expertise and form strong networks at internal and external level in order to know which technologies can help them to achieve the company objectives, which new products and solutions their customers demand and how they can ultimately support the processes. 


Industry and science work out sope of activities 

An important role in the digital professionalisation of procurement plays the new ”Think Tank for Pro-curement 4.0”. The group of experts was initiated by the Association for Supply Chain Management, Procurement and Logistics (BME) and Fraunhofer IML. It is one of the first working groups in the whole of Europe that explicitly takes care of the effects on procurement by Industry 4.0. A recently published study based on interviews with experienced procurement experts, CPOs and high-ranking procurement managers from well-known companies already demonstrates towards which direction procurement can and has to develop. Now, the new Think Tank has the task of checking and further developing the find-ings and conclusions produced within the scope of the pilot study. The experts from the fields of indus-try and science should work together to develop an application-oriented plan of action, concrete measures and helpful tools based on the fields of activity for procurement identified in the study. 


Procurement ought to benefit from opportunities

And this is desperately needed. Because existing fears based on the changes expected seem to result in a passive approach. An example of this situation is the fact that there is currently no response as to how cultural change needs to be managed and how staff can be successfully involved. The point of how the impending qualification requirements for employees (new training content and the time and scope of training) should be tackled gives also rise to more questions than answers and rather causes compa-nies to choose to observe the situation than take action. All this implicates to take up a rather monitor-ing position. For experts still do not agree with each other on the fundamental question of how the role of people in Procurement 4.0 will develop – more important than ever or less important? Companies are currently lacking a concrete roadmap as to how the targets, that they set, can be achieved. Only, if the goals can be achieved procurement will live up to the set expectations and its own possibilities: To pave the way for or even become a pioneer for Industry 4.0. 



Dr. Axel T. Schulte is Head of Department Procurement and Finance in Supply Chain Management at Fraunhofer Institute for Material Flow and Logistics IML. He is member in the ”Think Tank for Pro-curement 4.0”.



Companies that want to knock their procurement organization into shape for Industry 4.0 have to identify an individual scope of actions. Since recently, ”Fraunhofer Einkauf 4.0 Check” supports companies in evaluating both qualitative and quantitative success factors (in the areas of technolo-gies & systems, organisation & processes, management & human, suppliers, business models and controlling & KPIs) and identifying the essential fields of actions with respect to Industry 4.0 by a gap analysis – the basis for the development of an individual roadmap. This check is also available in English so that procurement can now globally compete with other procurement organisation within or outside the company. The check attracts wide interest of companies in Germany, Europe and Asia.


You can download the pilot study ”Procurement 4.0 – Digitalisation in procurement” of Fraunho-fer IML and BME-Bundesverband Materialwirtschaft, Einkauf und Logistik e.V. (Association for Sup-ply Chain Management, Procurement and Logistics) in English here.