COLLABORATION
OPENNESSANDTRANSPARENCY Nine out of ten firms say openness and transparency are important or very important to supplier relationships. This can be judged through behaviour and actions. And while it is difficult to measure behaviour, other than to observe it, it is possible to measure actions. The act of sharing information is an indicator of how open and transparent the relationships are and we have seen an encouraging increase in the sharing of more strategic information compared with last year. However, less than half of companies are prepared to share their company strategy and less than 40% talk about end customer expectations.
THREE INFOURBUSINESSES SAYTHEYARELOOKINGFOR SUPPLIER INNOVATION
NEARLYALLBUSINESSESOFFER SUPPLIERSATLEASTSOME GUIDANCEON INNOVATION
Fig 30. Are you actively seeking innovation from your suppliers?
Fig 31. Do you provide your key suppliers with guidance and direction on areas to focus innovation effort?
Yes 75 %
8 %
Always
33 %
Often
No 17 %
51 %
Occasionally
Don’t know 9 % Note: due to rounding, percentages do not sum to 100.
1 % 7 %
Less thanhalf of businessesshare companystrategy withsuppliersand only38%talkabout endcustomerneeds
Never
Don't know
Organisations that actively seek more supplier-generated innovation often debate the best way to go about it. They can adopt an open approach – and risk being swamped by a mix of sales pitches, untested, off-the-top-of-the-head ideas and well-intentioned but irrelevant ideas. Or, they can direct suppliers towards innovation that will address major business challenges, saving time and effort on both sides, but risk missing those big ‘off-the-radar’ ideas that represent radical, game-changing innovation. Our findings suggest that the overwhelming majority of companies give at least some guidance or direction to suppliers on innovation (Fig 31) . 33% Only 33%of organisations have an effective innovationmanagement process in place
So why is it proving so difficult to turn the aspiration for innovation into reality? The most commonly reported barriers are organisation complexity, the lack of a defined process for managing innovation and a lack of time and resources. Businesses are yet to overcome these barriers because 33% experience internal resistance to external ideas and 7% are not even looking. In some cases suppliers clearly do not help themselves, as 41% of companies believe suppliers look at an invitation to innovate as an opportunity to sell (Fig 32) . This can be addressed by better communication, an effective process to manage innovation and the use of technology.
INNOVATION In the best supplier relationships, good ideas and innovation should flow freely. We know from our research with sell-side organisations that many are desperate to engage on innovation. As in previous years, we see a gap between the desire to get suppliers to innovate and achieving that goal in practice. Harnessing more supplier innovation is considered an important or very important business driver for SRM by 50% of respondents and 75% report that they are actively seeking more innovation from their suppliers (Fig 30) . However, only 33% of respondents report having an effective innovation management process in place. So it’s hardly surprising that the goal of supplier innovation remains elusive. Leaders are twice as likely as followers and more than three times more likely than others to have an innovation process. However, more than 30% of leaders and followers say they are poor at attracting, evaluating and implementing supplier innovation. They too have a lot of work to do.
33%of businesses experience internal resistance to external ideas
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