Supplier Innovation
Supplier Innovation – Even the smallest one can change the world
April 22, 2020
Alex Basso
2 minutes

Beatrix Potter famously wrote, “Even the smallest one can change the world”. 

Looking at Supplier Collaboration & Innovation in the context of Covid-19, we have already witnessed some interesting ventures between organisations. To Beatrix’s quote, can the smallest of suppliers or ideas collaborated on, really change the world? 

A great example of this is Eric Gjerde, CEO of Airon Corporation. A small ventilator maker in Gainesville, Florida. Normally a good month of sales is 50 units, but having recently collaborated with Ford and GE Healthcare, together they are producing 50,000 units.

True innovation and collaboration at speed, from the most unexpected of places.

McKinsey stated that “55+% of innovations are sourced externally.”

How many “small” ideas exist within your own supply chain? How many Airons are there that can drive innovation to solve problems, create solutions and add value?

External Proof of Concepts (POCs) are a great source of innovation as these ideas see greater research and development resource in comparison to purely internal projects. This helps to significantly de-risk the entire process. However, when speaking with industry leads, POC programmes are often disconnected, lack alignment with corporate goals and don’t enjoy executive sponsorship. This is especially true in large, globally distributed organisations. 

Essentially, a great waste of resource, money and opportunity which is something no one can afford in the current climate. This situation came true for a client of Vizibl that reduced POCs by 40% through the establishment of a programme supported by SC&I technology.

The biggest challenge is often visibility. What you cannot see, you cannot manage; what is not managed is subject to risk.

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The risk is missing the next ‘small’ idea. This idea could change your organisation’s ability to respond to new challenges or help in finding a new competitive advantage for your product or service.

When you think towards your own organisation, how easily can you define and report on your supplier innovation pipeline across the business? Whether this be on meeting sustainability goals, evolving the product (quoting McKinsey again, 25% of revenue was derived from product innovation) or internal efficiencies.

Covid19 has propelled collaboration to new heights, but post pandemic, how can you make SC&I “business as usual”?

As the world changes with such unpredictable velocity, the next ‘small’ POC may not change the world, but it might change your organisation’s ability to grow, improve profitability and drive advantage.

The Covid crisis has shown that if we open our minds to innovation outside of our own organisations, we can achieve greater outcomes in less time and thus proving the value of untethered collaboration. 

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But how do we make this work post crisis?

We start with visibility & connecting people.

The first step to sustainable innovation is taking control of your POC programme, connecting people, gaining visibility, accountability and ensuring every POC is aligned to your organisational goals. 

This is not only the clear starting point, but eventually the cornerstone to creating a supplier innovation ecosystem. Which if the commentators and analysts are correct, will be the future mandate of best in class Procurement & Supplier Management. 

Original article by Steve Harrison

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