“Innovation projects” have been popular with procurement teams for many years now, and for good reason. If a procurement team can provide ideas that bring in more revenue, rather than just contain costs, colleagues in other functions and parts of the business will find its services far more valuable.
Right now, however, growing numbers of procurement teams are interested in collaborating simultaneously with multiple suppliers to come-up with new ideas or ways to improve existing products and services.
In fact, 59% of respondents to a recent CEB benchmarking survey on supplier development and innovation say they’ve worked on multiple collaboration projects.
In practice, however, these initiatives can be difficult to carry out. Working with multiple vendors on a single project can present pitfalls: Will suppliers feel comfortable sharing information with each other, especially if they are competitors? Will they get along? Will logistical difficulties of working with a greater numbers of suppliers complicate the initiative?
These tips will help.
When possible, invite senior non-procurement leaders to important events, like supplier summits: Their input can help Procurement position the project as an important opportunity for suppliers, and will highlight the company’s commitment to partnering with them. These senior participants can also share specific information that Procurement might not have, like business unit objectives.Inviting senior execs to these events can also help raise Procurement’s profile in the business. But Procurement should make sure not to waste their time: discuss expected outcomes beforehand to help everyone keep an eye out for unexpected results or new intelligence.
Communicate the value of supplier participation: Vendors prioritize collaborative partnership — as opposed to a relationship that doesn’t go beyond the transactional — when determining which companies are their customers of choice. Procurement functions can make it clear that they are interested in collaborating with a supplier on new projects to improve their standing as a customer.What’s more, if procurement functions can involve senior-level participants from across their firm, they can present this as an opportunity for the supplier to explore other types of investments with the business. Read more