Weekly value-added in 5 minutes
Dear Innovation Drivers,
Welcome back to ProcWee, your go-to source for insights into the world of procurement and supply chain management. Last week, we explored how procurement can be a key driver in risk management, helping businesses navigate uncertainties. This week, we're delving into an equally critical aspect: Procurement's Role in Innovation & Product Development. Discover how procurement professionals can not only support but drive innovation, ensuring companies stay ahead in competitive markets. Here’s how:
In today’s email
ProcurementAsDriver - Procurement's Role in Innovation & Product Development
SCM Takeaways
Exclusive Blinkist Deal
Book Recommendations
C2B Takeaways
This Week's Topic: Procurement's Role in Innovation & Product Development
1. Identifying Innovative Suppliers
Identifying and engaging with suppliers who bring innovative solutions or technologies.
Case Study: 3M Corporation's partnership strategy, which includes collaborating with suppliers to co-develop products, leading to innovations like the Post-it Note.
• Examples:
- 3M: Collaboration with adhesive technology suppliers to develop new products.
- Tesla: Engaging battery suppliers to enhance electric vehicle range.
- Unilever: Partnering with sustainable packaging suppliers for eco-friendly products.
(Source: Anderson, 2020)
2. Strategic Sourcing for Innovation
Selecting suppliers not just for cost but for their innovation capabilities.
Case Study: Procter & Gamble’s (P&G) “Connect + Develop” initiative, which seeks external innovations to incorporate into their product lines.
• Examples:
- P&G: Sourcing novel ingredients for consumer goods.
- Samsung: Partnering with semiconductor suppliers to advance tech products.
- Nestlé: Collaborating with food tech companies to develop new food products.
(Source: Caldwell, 2019)
3. Early Supplier Involvement (ESI)
Involving suppliers early in the product development process to leverage their expertise and innovation.
Case Study: Boeing’s use of ESI with its suppliers for the Dreamliner project, leading to advanced materials and technologies.
• Examples:
- Boeing: Collaborating on new materials for aircraft.
- Intel: Working with suppliers on next-gen chip technologies.
- Adidas: Partnering with material suppliers for innovative athletic wear.
(Source: Dyer & Singh, 2018)
4. Co-Development and Co-Innovation
Collaborative development of products and technologies with suppliers.
Case Study: Cisco’s co-development strategy, which involves close partnerships with tech suppliers to co-create networking solutions.
• Examples:
- Cisco: Developing new networking technologies with hardware suppliers.
- Ford: Co-developing automotive technologies with tech firms.
- Philips: Partnering with healthcare tech companies for innovative medical devices.
(Source: Anderson, 2020)
5. Leveraging Supplier Expertise for Market Intelligence
Using supplier insights to understand market trends and consumer needs.
Case Study: Toyota’s partnership with its suppliers to gain insights into consumer preferences, informing their product strategy.
• Examples:
- Toyota: Using supplier feedback for product improvement.
- Apple: Leveraging suppliers for insights into consumer electronics trends.
- Nike: Collaborating with textile suppliers to stay ahead of fashion trends.
(Source: Caldwell, 2019)
Sources:
- Anderson, P. (2020). Supply Chain Management: Strategy, Planning, and Operation. Pearson.
- Caldwell, N. (2019). Procurement in Manufacturing: A Comprehensive Guide. HarperCollins.
- Dyer, J. H., & Singh, H. (2018). Strategic Sourcing: An Overview*. McGraw-Hill.
SCM Takeaways
The integration of procurement into innovation and product development is crucial for leveraging supplier capabilities, enhancing product offerings, and maintaining a competitive edge. Procurement professionals can drive innovation by:
1. Building Strategic Supplier Relationships: Identifying suppliers with strong innovation track records, as seen in the Boeing Dreamliner project, can lead to significant advancements in product development.
2. Encouraging Early Supplier Involvement: Involving suppliers early can reduce time-to-market and improve product quality, a strategy successfully employed by companies like Cisco.
3. Collaborative Development: Co-development with suppliers ensures that products meet market needs and leverage cutting-edge technologies, crucial for industries like technology and automotive.
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Book Recommendations
1. "Innovate inside the Box: Empowering Learners Through UDL and the Innovater’s Mindset” by George Couros and Katie Novak.
This book blends the concepts of innovation and inclusivity, offering strategies that procurement and SCM professionals can use to foster an innovative culture within their organizations. It’s a great resource for those looking to integrate innovative thinking into their procurement processes.
A strategic guide that covers the essentials of procurement, with a focus on innovation and supplier relationship management. A must-read for those aiming to drive procurement excellence in their organizations.
3. "Strategic Sourcing in the New Economy: Harnessing the Potential of Sourcing Business Models for Modern Procurement” by Bonnie Keith, Kate Vitasek, Karl Manrodt, and Jeanne Kling.
A comprehensive guide to modern strategic sourcing practices, this book delves into innovative business models and how they can be leveraged to enhance procurement efficiency and innovation. Perfect for professionals seeking to understand the latest trends and strategies in sourcing.
C2B Takeaways
Innovation in procurement isn't just for businesses; consumers can also benefit from understanding these strategies. Here’s how individuals can apply these concepts:
Engaging with Innovative Products: Look for products developed through innovative supplier partnerships, like eco-friendly packaging. Choosing sustainable packaging products that showcase collaboration between brands and innovative suppliers.
Early Adoption of New Technologies: Stay informed about early-stage innovations and consider being an early adopter. Exploring new tech gadgets or health products that result from co-development projects.
Informed Purchasing Decisions: Use market insights from suppliers to make informed purchasing decisions. Reading up on the latest trends in technology or fashion influenced by supplier insights.
We Learned Today
Key takeaways from this week's newsletter:
1. Strategic Supplier Engagement: Essential for accessing cutting-edge technologies.
2. Early Supplier Involvement: Reduces development times and enhances product quality.
3. Co-Development: Ensures products are market-ready and meet consumer demands.
Thank you for reading this week's edition of ProcWee! We look forward to sharing more insights with you next week. Have a great week ahead!
PS: What’s the #1 thing that made you want to check out this newsletter? Reply and let us know. We read every reply.
