Leverage your suppliers to drive innovation
While technology has played a significant role in the area of design collaboration and other supply management areas viz spend analysis, negotiation, and contract management and purchasing, it is still perceived in a negative role in area like sourcing. Suppliers still see sourcing technology (e.g. eAuctions) as a way to let go price at their expense and this is a main detriment to the collaborative relationship with suppliers for driving innovation. We also need to be cognizant of the fact that technology alone can’t overcome the long standing poor purchasing practices such as –‘choosing the supplier on price alone’. Technology can only help in speeding up the established process.
Focusing on price savings alone means organizations are potentially missing some bigger opportunities supplier can bring which will create value for both supplier and organizations. Organizations are needed to look at suppliers beyond the cost center view and more as a partner to add value to the business. Some of the areas where supplier can become an engine of innovation are:
- Using supplier as a source of new and much needed technology in areas where organization don’t want to invest from strategic perspective
- Working collaboratively to develop new technology/product/services
- Gather best practices and ideas from supplier and use suppliers as a change agent in their set up
- Leverage supplier in product development for getting new product/services to the market
- Develop faster cycle time which would give competitive advantage like - speed of order fulfillment
- Leverage diverse supply base to understand their culture and geographies and use this knowledge to expand market potential
There’s an increased expectation from procurement professionals to contribute beyond the traditional transactional & sourcing support and use their global supply base as a catalyst in driving innovation at an organization level. This would also mean that the underlying technology needs to be enabled in a powerful way to drive better collaboration and enhanced automation thereby enabling procurement professional to contribute strategically. Organization should consider platform as an option with underlying offered technology as an accelerator for achieving supplier led innovation in an effective way.
