INNOVATION FEATURE
SRM leaders are most likely to support supplier innovation
SRM leaders are five times more likely to have a process than followers An effective innovation process (leaders, fast followers and followers)
Working collaboratively with suppliers on innovation
It’s encouraging that more companies are reporting increased collaborative working with suppliers (over 66%), it seems that not much of this is focused on innovation. Just 20% report increasing collaborative work on innovation. SRM leaders perform better, but still, only 30% say that supplier innovation is one of their collaborative gains. Even leaders are missing many opportunities. Conclusion Despite widespread acknowledgement that organisations will increasingly rely on suppliers for innovation, only a minority of companies have a plan to ensure they maximise suppliers’ brightest ideas for improving products, processes and services. The pitfalls are common. Because innovation is poorly defined, it is difficult for organisations to know if they are getting what they want. They seldom apply the right metrics, so they are unlikely to know if they have succeeded. Incentives to involve suppliers are crude and fail to understand the supplier’s perspective. Organisations tend not to put the skills, resources or technology behind supplier innovation. Lastly, too few companies have a process for supplier innovation. Naively, they think it can be forced via contract and performance management. But those who develop a method to harvest innovation from suppliers will get the most value from them, as SRM leaders’ performance demonstrates.
An innovation strategy is in place (leaders, fast followers and followers)
Leader
Fast Follower
Follower
Leader
Fast Follower
Follower
Yes
Yes
57%
57%
30%
30%
8%
8%
No
No
39%
39%
62%
62%
82%
82%
Don’t know 4% 8% 11%
Don’t know 4% 8% 11%
Innovation incentives remain crude Features of a supplier innovation strategy (all companies)
We have a provision to consider innovation as part of RFPs 22%
We have an innovation incubator or similar
10%
We have an innovation fund
We have arrangements to protect supplier IPR
7%
20%
We have supplier innovation awards
6%
We have an appropriate supplier contract clause
Other (please specify)
16%
5%
11% We have a mechanism for sharing benefits of innovation with suppliers
We don’t currently have any enablers or incentives in place
4%
Most companies do not have an effective innovation process
Too few companies have a process for supplier innovation. Naively, they think it can be forced via contract and performance management.
An effective innovation process (all companies)
38% Yes 54% No 8% Don’t know
2019 GLOBAL SRM RESEARCH REPORT
57
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