How can I work with my suppliers to innovate, Part 1

Ask Joanna

The CPO's Corner

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Question:

How can I work with my suppliers to innovate, Part 1

Joanna's Answer:

In a direct material situation, procurement professionals have a wonderful opportunity to harness the resources of the supplier community to innovate. I’ll explore two of them in two sequential columns. In this column, we’ll talk about linking suppliers to people within your company to achieve innovation.

Often we get stuck in a paradigm.  We enable our employers to lower costs, save money, pay less – whatever your company calls it. Success one year leads to higher goals for the next, and soon we find ourselves struggling to meet the numbers because the fat is gone from the system.

But what if we help our employers sell more? What if we had a way to develop new products, to get them to market quickly?  What a great way to get the “seat at the table” we’re always talking about.

The key may very well be the brainpower sitting at your suppliers. Brainpower we can harness to the benefit of both of us. Our suppliers are always trying to get more embedded in our firms, to be so ingrained that we think of them, not their competitors, when there is a big task at hand. They’re always trying to meet the Marketing or the R&D folks. We tend to suppress that, don’t we – we want them to go through us, we want to be involved in all the conversations. We can, in a way, be bottlenecks.

Procurement has a unique opportunity, instead, to be a bridgebuilder. If we align with the Marketing and R&D communities, we can understand where they are headed – what’s under development, what are the “pie in the sky“ ideas that they don’t have time, knowledge, or funds to work on themselves.  We alone have the contacts and know-how to approach the supplier community to find the people with the right technology and capability to provide what we need. We do that every day for the products we produce now. What if we focus attention on the future?

And this doesn’t have to be the exclusive purview of the leadership team.  Aligning with your company’s strategy and building bridges to suppliers who can help get there is a role that any procurement professional can play.

Here’s an example: A beverage company ran an ad for a citrus flavored product that showed a bottle being twisted with lemons and limes popping out. People started asking for the beverage in the twisted bottle. But that was just in the visual – there was no real twisted bottle. And the world at large perceived that a bottle like that would be too expensive to make or too delicate to run on a high speed filling line. Enter the Procurement team, who upon hearing the story looked at thirteen container manufacturers across the globe. Twelve said no, one figured it out. The company gained a unique package and the supplier gained substantial new volume as the product’s sales grew in the ensuing years.

The key to making this work was for the procurement support to listen to the objective, look outside the firm, make the match, and get out of the way. That doesn’t mean abandoning the project once it starts, but it does mean making sure that you’re being a bridgebuilder, not a bottleneck.  


About Joanna

Ask Joanna headshot 2018

Joanna Martinez is a global procurement / supply chain leader and the founder of Supply Chain Advisors LLC. She is a frequent lecturer and blogger on procurement topics and also provides coaching, strategy development, training, and cost reduction opportunity assessment. Her clients range from Fortune 100 companies to technology startups.

As either regional or global CPO, Joanna has led transformation initiatives for companies in many different sectors: among them Johnson & Johnson (consumer products), Diageo (beverage), AllianceBernstein LP (financial services) and Cushman & Wakefield (real estate services, property management). She has also held client-facing roles, effectively giving her the opportunity to “sit on both sides of the table”.



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