3 Steps to Spark Supplier Innovation

By Hugo Britt | July 6, 2021

What would automotive manufacturers do without the competitive edge they gain from supplier innovation? How would the healthcare sector manage without innovative suppliers designing lifesaving medical devices?

In many companies, it’s common for the best ideas to come from the supply chain rather than from the internal R&D team.

Technology is another industry primed for supplier innovation. Apple is a great example of a company that is prompting supplier innovation and change. As a result of Apple’s new M1 chip, software companies like Adobe are acting quickly to adapt and optimize their software to run natively on Apple computers with the new chip. And with rumblings of an M2 chip launching in 2021, they will likely have to innovate again.

Supplier innovation has a tremendous effect for businesses and consumers alike in that it can motivate change, generate satisfaction, and build excitement. But what if your company doesn’t sell a product reliant upon or impacted by supplier-sourced components? How can procurement benefit from supplier innovation if you’re mainly buying office equipment, services, and supplies?

Supplier innovation can take many forms

Merriam Webster defines innovation as a new idea, method, or device. In other words, innovation doesn’t necessarily mean the invention of a new gadget. It may simply mean working smarter.

For many small businesses, innovation simply begins with communication.

Procurement is a natural collector of requests and feedback regarding purchasing and has information that is valuable to suppliers. The challenge is to communicate that information and build collaborative relationships with suppliers. Your company’s experience, needs, and even your budget can spur supplier innovation.

Procurement can work with suppliers to tackle everyday challenges like budgetary constraints or cumbersome processes. Working together to make small changes could lead to cost savings, time savings, or efficiencies that make people’s jobs easier.

Below are three steps you can take to start driving innovation as a Sourcing Hero in any industry.

Three ways to increase supplier innovation

1. Identify pain points

First, evaluate what and for whom you purchase and think about possible pain points in the process.

Is a tight budget preventing you from making necessary upgrades? Is shipping time putting a strain on productivity? Has a heavy workload kept your organization stuck in a rut, too busy to deviate from the same recurring orders, brands, or contracts?

These common challenges are perfect opportunities to reach out to suppliers for ideas and solutions.

2. Ask for feedback

Next, reach out to key stakeholders and request feedback. Ask if your internal customers are happy with their current supply. If they aren’t, you have an opportunity to ask why.

In the answers, look for areas that could benefit from supplier innovation. Note any questions, needs, or blockers you discover in your conversations with internal stakeholders. Feedback, both positive and negative, can serve as a launch pad for a conversation with a supplier to prompt ideas and solutions.

3. Connect with your suppliers

Finally, block half an hour on your calendar with the names of a few suppliers you’ve formed good relationships with or suppliers you’d like to open the lines of communication with. During that half-hour, reach out to those suppliers and ask if they would be willing to collaborate with you to come up with innovative solutions. Your needs as a customer can spur improvements in their products, and their ideas can help you drive innovation as a sourcing hero.

Do your suppliers have any great ideas that could benefit your organization? It’s worth initiating a conversation to find out. This could also strengthen your relationships. Suppliers are used to taking orders and meeting needs, but an interest in collaboration could be a welcome surprise and move the relationship beyond the transactional stage.

No matter what you source from your suppliers, you can be a catalyst for supplier innovation by communicating your needs and ideas, collaborating, and keeping the lines of communication open.

Your GPO can help spark supplier innovation

Lastly, group purchasing is also a gateway to supplier innovation. Una serves our clients as a voice with suppliers and an agent for change. Whether it’s reaching out to suppliers with client questions or obtaining new or improved contracts to meet our clients’ needs, we’re eager to help spark innovation for our customers.

Reach out to our team to learn how a GPO can help your organization innovate!


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