Suppliers should innovate for free

8 December 2008
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08 December 2008 | Jake Kanter

More than three-quarters of buyers expect suppliers to innovate without offering extra payment, according to the latest SM100 poll.

The survey of 100 purchasers found 79 per cent would not offer vendors more money to propose ideas aimed at improving existing agreements. But 21 per cent said financial rewards could encourage suppliers to develop products or services.

Many of the respondents said forging strong relationships and increasing collaboration would provide competitive advantage. "Real innovation comes from personal commitment, which comes from effective supplier relationship management and coaching," said Stephen Caddell, head of supply chain at Atkins Asset Management.

Neil Dixon, procurement manager at Leaseplan, had organised innovation workshops with suppliers. He explained that vendors often provide new ideas for each other.

Others argued good suppliers should bring new ideas as part of a contract. Robin Hunt, director of procurement at the University of Surrey, said: "Suppliers should be innovative without charge. Otherwise they are likely to fall victim to 'incumbentitis', a terminal disease affecting complacent suppliers who do not innovate throughout the life of a contract."

SMdec2008

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