INNOVATION FEATURE
Supplier innovation is broadly defined Definition of innovation (all companies)
Executive support Support for supplier innovation amongst executives almost exactly mirrors that for SRM overall at close to 60%. The two ideas are closely linked and can feed off each other. SRM can gather more support via its value proposition, which should include a strong element of supplier innovation – a concept high up the corporate agenda. Innovation strategy Evidence of innovation strategies is sadly lacking. Only 24% of companies have a supplier innovation strategy. However the figure for SRM leaders is more encouraging at 61% and for fast followers, the figure is 40%. Those getting the best returns from SRM are investing in a supplier innovation strategy. What’s in an innovation strategy? Where an innovation strategy exists, most companies include a common set of best practice features. Innovation should be aligned to business growth and improvement goals: 73% of companies with an innovation strategy ensure this is the case. It is important that people understand what you mean by innovation in the context of the company’s approach. Around 67% of respondents say they include their innovation definition in their strategy document. It should have senior leadership endorsement and ownership: 62% of respondents say they have such support. Enablers and incentives Despite the relative immaturity of supplier innovation management processes, we were keen to discover what enablers and incentives organisations have put in place to help with innovation and to engage suppliers positively. The most frequent approach is to insert a requirement in an RFP requiring the supplier to either offer innovation as part of a proposal or to lock them into innovation as part of the contract. Almost 58% of companies include it in RFPs, and 41% make it a contractual clause. The popularity of using RFPs and contracts in this way reflects the relatively unambitious
34% Only transformational change and improvement that is genuinely disruptive and new
2%
None of the above (please specify)
24% Continuous
improvements that are brought about by many incremental advances in technology or processes
40%
Transformational change and continuous improvement
Most organisations think they are poor at supplier innovation Supplier innovation approach and capability self-assessment (all companies).
20%
15%
10%
5%
0%
1 Very poor
2
3
4
5
6
7
8
9
10
Very good
2019 GLOBAL SRM RESEARCH REPORT
55
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