Procurement Innovation with Supplier Relationship Management (SRM)
As technology continues to develop at a rapid pace and the time to market shortens, businesses are urgently seeking ways to innovate.
While innovation initiatives are often driven outward from within, suppliers are an often-overlooked source of innovation.
Taking a holistic approach that incorporates suppliers into a complete business strategy can accelerate innovation throughout the supply chain and operations.
Supplier Management is a crucial strategy by which Procurement can drive value beyond cost savings. In fact, the most effective management strategy treats suppliers not simply as providers “requiring management” but as true partners, partners who are involved in developing solutions AND executing them. For example, imagine a high-end retailer with hundreds of stores designed using delicate finishes. Their finishes need specific care, but heavy traffic dictates very regular cleaning to keep the store beautiful. They may look to their janitorial maintenance supplier to develop cleaning techniques and possibly even cleaning products to pilot in some stores in coordination with the store operations.
Put Innovation on the Agenda
If you are already engaged in supplier management, setting aside time specifically to discuss innovation during your business review meetings is a great way to spur conversation on innovation and hear from your suppliers about new products or service delivery techniques they have implemented or are testing. Being open with your suppliers about your priorities will help them bring solutions that hold the most potential for your business.
Keep in mind successful supplier management requires that Procurement teams not act as an island; engagement from the business team is crucial in providing feedback. By incorporating innovation into the business review meeting, Procurement can demonstrate significant additional value to internal stakeholders which will improve partnerships and engagement on current and future strategic sourcing projects and position Procurement as a center of innovation.