Crowd-sourcing supplier innovation Far from being a secret ingredient to success, supplier innovation can be captured, cultivated and measured. But only by businesses who use the right tools. ARTICLE 04/04
When a business asks suppliers for new ideas, they have little influence over what they will receive. A contract requirement for five new ideas every year might result in five off-the-peg sales pitches and a dispute between the supplier, who feels it has met the brief, and the buyer who has got nothing of value. But SRM applications can guide innovation and specify how it will meet business requirements, in effect, generating a business case, rather than a sales pitch from the supplier. The first problem is defining innovation. The State of Flux SRM application Statess enables procurement or stakeholders to upload content, including video and presentations, to offer suppliers a clear idea of what innovation means to them. They only need to do that once and all suppliers, who are invited to innovate, can view it. In the tool, buyers can set innovation challenges and invite certain suppliers to respond. It could be suppliers of a certain category, or it could be all the suppliers contributing to a particular product or service on the buyer side. The tool restricts their responses; it’s not the same as sending an email. They can only put in information buyers asked for, not junk or sales pitches. Each section can be designed by procurement to feed directly into a business case. Procurement can also open the system up to prospective suppliers to assess their capacity for innovation before awarding themwork.
INNOVATIONCANBE DIVIDED INTO TWOCATEGORIES. 01 02 GUIDED INNOVATION
OPEN INNOVATION
First is guided innovation, where suppliers are provided with a brief via the SRM tool based on specific challenges defined by the customer. Suppliers are invited to suggest improvements to processes and products that already exist. Procurement can work with stakeholders to clearly define the processes they want to improve. Buyers can set innovation challenges and invite certain suppliers to respond. They can only put in information buyers asked for, not junk or sales pitches. Each section can be designed by procurement to feed directly into a business case.
Next is open innovation. Sometimes suppliers can come up with solutions that the business are not aware they need. The process can also be controlled by SRM tools, but it should not be a free-for-all. Responses from suppliers can still be controlled to ensure they form a business case for developing new ideas.
Using an SRM tool to manage supplier innovation is akin to internet crowd-sourcing for ideas and funding. It becomes a social platformwhere procurement and stakeholders can control the input. Innovations that were once hard to define and capture can be controlled and nurtured. Hard work will lay ahead before new ideas benefit the business, but SRM tools can industrialise the initial process, making it more effective and efficient.
09 STATEOFFLUX
2016GLOBAL SRMRESEARCHREPORT
State-of-flux_Master_Document_Final_Print.indd 9
12/10/2016 19:29
Powered by FlippingBook