Navigating Turbulence by Sourcing Innovation

Procurement and Supply Management organizations have traditionally been highly focused on costs savings and supply continuity.  These goals are more important now than ever – and the context for pursing them more complex.   

There is a strong tendency for individuals and organizations to hunker down and focus on self-preservation during times of crisis.  Unfortunately, this often translates into zero-sum thinking, reduced collaboration, and a lack of creative joint problem-solving – limiting innovation, just when it is most needed.

At many procurement and supply organizations, “innovation” has been understood to be about supplier contribution to new technology or products to drive revenue growth.  Often under-emphasized are innovation efforts with suppliers focused on ways to reduce costs, improve efficiencies, and jointly manage uncertainty and risk.

In this webinar, originally presented with ISM, we explore how companies can re-balance their strategic focus to put more emphasis on joint innovation with suppliers during times of turbulence.  We share current (and ongoing) research on joint innovation with suppliers, and case studies – with an emphasis on insights and lessons relevant to current dislocation and challenges posed by COVID-19.

On-Demand Webinar Highlights

1. Leading Companies Approach Negotiations Differently
Leading companies realize, on average, 63% more of the value they target through strategic sourcing than do average companies. Three quarters of their negotiations are collaborative, and 75% of leaders report having a formal negotiation process that is “usually” or “always” followed.

2. A “Shared” Approach to Challenges We Face with Suppliers
How can we get the benefits of being a customer of choice? Ask for help from our supplier partners—and reciprocate that, by using not “leverage or pressure tactics, but rather innovation and creativity, to come up with good solutions together.”

3. A Different Framework for Sourcing Innovation
How do we enable our overall supply management organization to source innovation, not just parts, products, goods, and services? A framework that’s different from, but complementary to, Kraljik’s Matrix lets us analyze a spectrum of sourcing activities, from goods, to services, to solutions, to innovation.

4. “Real Value Comes in the Implementation”
How do leaders realize “significantly more value from their supplier contracts during the course of implementation—as well as more total value targeted by strategic sourcing initiatives? They align and coordinate efforts across multiple supply management disciplines—strategic sourcing, category management, negotiation strategies, and supplier relationship management.

5. When Spirited Disagreement Is a Good Thing
The best collaborative negotiations “have a lot of disagreement, often very spirited,” which we deal with effectively through creativity, commitment, and humility. Embracing this approach, “We’re going to try awfully hard to make sure the outcome is sustainable and beneficial for the supplier as well.”

6. Ensuring Successful Handoff from Sales to Delivery
How can we avoid delivery missteps after a seemingly successful negotiation with sales? Inviting delivery teams—even upstream R&D, product development, and design stakeholders—to participate in negotiations can help to “future-proof” the deal from the outset.