STATE OF FLUX
2014 GLOBAL SRM RESEARCH REPORT
RELATIONSHIP DEVELOPMENT & CULTURE 177
Figure 6.4. Barriers to harnessing supplier innovation – all respondents
WE ARE NOT ACTIVELY SEEKING SUPPLIER INNOVATION INTERNAL RESISTANCE TO CONSIDER EXTERNAL IDEAS NO STRATEGY REGARDING EXTERNAL INNOVATION LACK OF CLEAR INTERNAL OWNERSHIP MORE PRESSING PRIORITIES LACK OF TIME / RESOURCES COMPLEXITY OF THE ORGANISATION NO FORMAL PROCESS TO MANAGE EXTERNAL INNOVATION
OTHER (PLEASE SPECIFY) NO BARRIERS
0%
10%
20%
30%
40%
50%
© 2014 State of Flux
WHAT IS STOPPING INNOVATION?
So why is it proving so difficult to turn the aspiration for more supplier generated innovation, as a result of better engagement through SRM, into reality? The most commonly reported barriers are the lack of a defined process for managing innovation, organisation complexity, and a lack of time and resources. A clue as to why these frequently reported barriers have not been overcome might lie in feedback suggesting that 31% of companies have no strategy for external innovation, 29% experience internal resistance to external ideas and 18% are not even looking. The following feedback provides some examples of the challenges companies are facing to increase the use of supplier innovation. We find the question of idea and intellectual property ownership a challenge to answer. Director, Indirect Procurement – US motorcycle manufacturer Innovation governance is not yet clear. Head of Supplier Performance & Innovation – global pharmaceutical company Our customers resist change due to the cost and risk of qualification and implementation. Executive Vice President, Global Supply Chain and Chief Procurement Officer – international packaging company
We lack the ability to make decisions and execute. Supplier Advisor – global oil and gas company In times of crisis we willingly take on supplier innovations, but in our day-to-day business we are more reluctant, and the oil industry in general is very conservative. Global Contracts & Services Manager – US oil and gas company We frequently experience site resistance to supplier ideas and innovation. Analyst – Canadian mining company We have a huge list of potential opportunities and pride ourselves on liaising with our supply chain to attract and evaluate innovation. However, the lack of ability to deliver strongly impacts our future supplier approach. Principal SRMConsultant –UK insurance company A lack of training and vision on why our professionals should engage suppliers in innovation, as well as how they can effectively do so. Director, Supply Chain Engagement – US manufacturing company
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