Nikhil Parva
Do your Top Tier suppliers feel encouraged to share ideas with your organization? Are you driving the best possible innovation together with your Suppliers? Do you have a framework in place to capture and drive innovation in your organization?
If the answer to any of these questions is a resounding No, it's better to continue reading
CPO's top 3 Priorities: Cost Reduction - 79%, New Product & Market Development - 53%, Organic Expansion - 50% - Deloitte Global CPO Survey 2013
Shouldn't Organizations drive Innovations through their Supplier ecosystems as an effective mechanism to address these top 3 priorities?
Innovation is still a real dichotomy. It is consistently identified as one of the most important elements of the SRM value proposition. However, difficulties at the implementation stage remain - State of Flux 2013 Global SRM Survey
After all why hasn't Joint Supplier Innovation become mainstream? Why are some companies better at tracking and managing Supplier innovation compared to others? The answer may lie in a little known secret of having the right framework in place.
Here are three tips that can help demystify Supplier Innovations for your organization.
1. Supplier Segmentation
Segment your exiting supplier base to ensure focus on the Top Tier suppliers.
2. Create a framework
Understand the parameters that are valued by your business partners. Is it "Cost savings & Avoidance" or "Speed to market' or "Overall satisfaction of your Strategic Sourcing Department"? Design the framework to fit the needs of your organization. Here is a simple framework to capture Innovation across your Top Tier suppliers.
Governance: The next step is to put a Governance model in place to effectively manage the implementation of your Innovation Strategy?. Here are some tips
1. Involve stakeholders across various levels in the Supplier relationship
2. Divide the ideas into multiple buckets. This will help allocate sufficient resources based on the level of Innovation
3. Ensure the value proposition is clearly bought in by the Supplier and sufficient number of resources have been dedicated to effectively implement and drive innovation
3. Track, Monitor & Report
Having an effective mechanism to Track, Monitor & Report Innovation will help drive this initiative at an organizational level. Questions to ask:
1. How do we effectively Track, monitor & report Value from Supplier Innovation?
2. Which tool should we use to consolidate and report details?
3. How should we ensure continuous buy-in from Internal teams & Supplier organization?
The trick is to start simple and invest once you have a clear buy-in from stakeholders
Below is an illustration of different fields that can be tracked through a simple webpage created on Microsoft SharePoint or even Excel !
Feel free to share your experiences & success stories on 'Supplier Innovation'
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