Organisations now exist in an era where procurement-driven Supplier Collaboration & Innovation needs to be at the forefront of a company’s growth strategy. But how does it differ from what has gone before…
It’s driven by business needs
Supplier collaboration, and the innovation that results from it, comes from an approach that is much more business aligned, holistic and beneficial for both parties. While quick wins in terms of lift and shift can generate huge early momentum, supplier collaboration & innovation teams should work on large and ambitious projects to drive the maximum business impact impact.
To do so, organisations need to understand what suppliers to invest in with the input of relevant cross- functional leaders and business units internally such as manufacturing, R&D, engineering, and product line leadership. SC&I is all about business value creation. SRM was all about cost and risk reduction along with compliance. A supplier collaboration and innovation programme is a business-led approach to driving speed and growth out of your supplier or innovation network.
It’s more than just operational performance
The SC&I framework is a more comprehensive, unified way of working with your suppliers to leverage your supplier ecosystem and impact your company’s growth. Most current SRM programs focus on operational performance and risk. We see these as necessary foundational pieces that sit in the first of three buckets, the Align phase (The others being Engage and Grow see p.33). What is missing from SRM is that it doesn’t go beyond this. It is usually one way and cost driven.
At the core of SC&I is the collaborative aspect of creating value together. For the buying organisation this usually translates to collaboration for value beyond savings, collaboration innovation and/or collaboration for cost reduction. For the supplier there are huge upsides to being engaged on an SC&I program. Their business is more stable, they become more cost-competitive, and they improve their core capabilities. The suppliers can then deploy these capabilities to win more business externally.
Underneath all this there is a whole expanded framework including a shared understanding of strategic objectives, peer to peer communication channels, structured meetings and outcomes, 360° surveys & feedback loops, 3D performance, joint projects and initiatives, value tracking and a whole lot more. Trust, transparency and alignment are the foundational elements of the collaborative framework with suppliers and you need to have all the moving parts to achieve this.
Supplier Collaboration is the engine, Innovation is the outcome
SC&I defines how suppliers and the business connect, communicate and interface. It gives you transparency on your supplier led initiatives, increases their velocity and aligns these initiatives and projects to your business outcomes. Quite simply, it’s SRM with rocket boosters attached. Some may call it SRM 2.0, we believe it deserves a category all on its own.
Thats why we called it Supplier Collaboration and Innovation.