Getting the most out of your suppliers via Innovation

Abstract

Introduction

Procurement team has already been involved in the effort to improve bottomline savings, process etc. Cost Reduction as a goal is passe. Now, with changing business scenarios leading to New Product Development, there are growing expectations from Procurement to bring about Innovation. Since most of the companies have already exhausted internal innovation approaches, they are turning towards suppliers in order to bring about Innovation.

Main

Procurement team has multipleoptions to induce and maintain Supplier Innovation. This would lead to improved collaborative approaches with suppliers and encourage the suppliers to bring about innovation. The approaches include SRM Programs, Supplier Collaboration Models, Fixed Profit Margin Model, Flexible Contract Management, Crowdsourcing, Intrepreneur Programs. Using these approaches, the suppliers can either bring about Product development, Process improvement and ultimately bring about Value generation. Suppliers see these approaches as an opportunity to showcase their domain knowledge and benefit from the monetary support given by the clients.