How supplier collaboration is driving innovation in procurement

Under-pressure procurement leaders are turning to their suppliers in a bid to drive innovation.

A survey conducted by WBR Insights for the ProcureCon Playbook shows more than half of the industry leaders who responded are tapping into their suppliers’ knowledge to identify new opportunities. Furthermore, CPOs are using collaboration to help deliver on their sustainability agenda.

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As part of our research, we asked Stephen Tonks, Chief Supply Chain Officer at Fujikura Automotive GmbH, why he felt collaboration was so important. He said:

“I think new product development opportunities connect well with collaborating with suppliers for innovation and for what products can differentiate us from our competitors. If you have a new product, you can then broaden your customer base. This helps tackle a large portion of operational issues and the human side of it - talking with suppliers face-to-face and thinking about the innovation and what improvements can be made.”

To uncover more insights from industry experts such as Stephen, download the full report by clicking here.

Why supplier relations are so crucial

Innovative procurement strategies can help to reduce operating costs and generate business growth. A combined 64% of our survey respondents said supplier collaboration was key to driving innovative strategies, while working closely with suppliers can help CPOs gain access to new technologies and processes.

To gain even more insight into how supplier collaboration is helping to improve innovation, we spoke to Elvire Régnier-Lussier, former CPO at L’Occitane Group. She said:

“Relationships are key here. If you do not have a relationship with suppliers, then there is no need to have any digital tools. Data and data tools are just there to support mindsets. So having a good, trustful relationship with your supplier, regardless of how big or small the supplier is within your supply chain, is crucial. This relationship is very important for innovation and represents big spending and big turnover for your business. So, when we speak about innovation, it is not just about data, but it is essential to add some human intelligence.”

How you can work with suppliers to deliver sustainability commitments

CPOs are placing greater emphasis on supplier collaboration when working to achieve net zero CO2 emissions. This is apparent during contract signing and renewal, and 60% of our respondents said sustainability considerations were important when making decisions about their business.

Many multinational corporations have already pledged to work only with suppliers that adhere to social and environmental standards in their decision-making process. No one in our survey said they would not consider sustainability in their decision-making process, and the majority are prioritising the living wage as the most pressing issue. Fifty-five percent of respondents are placing an increased focus on diversity and inclusion.

New talent: the key to supplier collaboration

According to our research, respondents are keen to harness the potential of ‘new minds’ and are working to integrate ‘new talent that can look at the supply chain differently.’ Many organisations have a digital skills gap and bringing in new talent with fresh perspectives can help procurement teams gain an edge over their competitors.

Key suggestion: Become the innovation interface to drive lasting change

Collaborating with suppliers is crucial in an ever-changing landscape, and companies that fail to do so run the risk of falling behind their rivals.

Connecting with external suppliers can extend R&D capacity and even help to focus on sustainability goals. CPOs should also look to hire top talent and invest in training to bridge the skills gap and ensure they have a robust workforce. To discover the insights uncovered in the latest ProcureCon Playbook, download the full report here.