Manufacturing faces a turning point in today’s supply chain. Yes, raw material costs continue to be a top cost pressure for many small and mid-sized industrial manufacturers. But streamlining operations and addressing traceability play an even bigger role today to prevent against counterfeit products and improve product safety—perhaps a key indicator why the supply chain witnessed numerous cases of manufacturers bringing production back to the U.S. There is also the prevalent challenge that many manufacturers face today in the area of labor and talent shortage, as the aging population of those in the production trenches of manufacturing today becomes a glaringly obvious factor that, if not addressed, can have some massive impacts to the production supply chain for businesses across the globe.
“The talent search in manufacturing—on both the member and supplier side—is a big issue right now,” confirmed Louise O’Sullivan, Founder, President and Chief Executive Officer of Prime Advantage Corp., Chicago, and also Supply & Demand Chain Executive’s “Pro to Know” of 2013. “There are products such as pressure vessels where you must have a certified welder take on the task of welding—that has become a lost skill. The average certified welder in the U.S. is 60 years old—that sends a message that the lack of vocational school training over the past decade has presented a challenge to our manufacturers and our suppliers.”
While Prime Advantage does not directly work with vocational schools and other educational institutions to address this challenge, the buying consortium does serve as a guiding force in linking its buyer and supplier members together in a network environment to share best practices and information. For example, some existent Prime Advantage members who do address the talent shortage issue in manufacturing pair up with an educational group—providing an opportunity to then share gained tips, tricks and information with other members, or better yet, enable other members to get involved.
“Some of our members have partnered with local junior colleges or local trade schools to re-establish welding and other certified manufacturing skills as a future career,” said O’Sullivan. “We have a partnership with a group that is one of our suppliers that provides training for certified service agent talent to actually repair the equipment that is in the field.”
A 16-year-old buying consortium that helps mid-sized manufacturers achieve savings and form better relationships with suppliers, Prime Advantage provides members with strategic supplier relationships to provide them with technology solutions; new product development ideas; best practice sharing; and cost reduction through volume rebates and discounts. In the past decade alone, Prime Advantage paid more than $130 million in rebates and discounts to its manufacturing industry members. And while the rebates and discounts are a big benefit—long-time Prime Advantage member Wilbur Curtis Co. witnessed economic results and cost savings almost immediately after joining the group—the extra value-add that the buying group provides in services goes a long way for members.
“When you are in the buying world, you’re buying mostly products and items that you can physically hold in your hand as they are for your production line,” explained Ron Wilson, Chief Procurement Officer, Wilbur Curtis Co. “But Louise is really starting to delve more into services—something that we are starting to find more use for. For example, she just brought on a house that does translation services. In the last month or so, we brought on a customer that required us to make product labels that are in French. Well now, as a result of that translation house Louise brought on, they can do this for us,” Wilson said. And like many other suppliers and buyers who ship more to countries all over the world, having something in English is becoming more of a necessary need.