If organisations can innovate in the right way it can mean a competitive advantage and new opportunities, says Malcolm Harrison, group CEO, CIPS
If you do what you always did you’ll get what you always got.” Many people have laid claim to variations on this quote, including Anthony Robbins and before him Albert Einstein, Henry Ford and even Mark Twain. Regardless, what matters is the point it makes.
Managing complex supply chains means we are often working with long-established, well-honed and complex processes. It only takes one small disruption to cause absolute chaos. It is no wonder that we continue to follow established approaches.
Yet things are moving forward; change sometimes feels faster and more dynamic than ever. AI and blockchain are not just buzzwords, but actual technologies being implemented in real organisations. They are forcing businesses to adapt quickly, preferably with minimal disruption and cost.
There are many ways for the procurement and supply profession to lead the way on innovation – and it doesn’t have to be centred on the latest technology. What the profession does need though is forward-thinking procurement teams who can think outside of the box. According to PwC’s 22nd Global CEO Survey, 55% of respondents noted that the talent shortage meant they had an “inability to innovate effectively”.
Collaboration is the key
In a digitalised global economy you can’t manage a global supply change without internal and external collaboration. Sharing cross-functionally and sharing with suppliers is a very powerful way to innovate. Encourage your suppliers to look at things differently and seek value. Ensure procurement and supply is seen as an enabler, not just a cost saver. Focus on the outcomes, and how your supply base can bring innovation to achieve those outcomes.
The importance of agility
Organisations are prioritising simplicity and visibility, designing networks that can be easily reconfigured to react to external circumstances. If an agile and flexible approach can be fostered without too much fear of breaking with the norm, an organisation can respond much quicker when innovations are presented, reaping the benefits fast and without having to wade through layers of process and due diligence. This can become a competitive advantage in the marketplace.
Challenge the status quo
Larger suppliers will often be the harder ones to shift in terms of their approach, so look at the periphery of your supplier ecosystem. Smaller organisations are often much more able to bring the speed and agility that is needed. Many larger organisations have now created schemes to make it easier for SMEs to become suppliers such as Cummins’ Dragons’ Den (see page 39). Open innovation platforms or contract finder websites have allowed smaller suppliers to join the conversation and more of them are winning contracts for major projects.
But often SMEs and start-ups face huge barriers when it comes to working with large corporates. CIPS has collaborated with MSDUK to produce a Supplier Diversity best practice guide. Kai Nowosel, CPO for Accenture, joined the panel and at the launch event told the audience that the sell-in for supplier diversity programmes is easy; it’s a means of accessing goods and services that aren’t currently widely available. Accenture has adapted its style and processes to accommodate smaller suppliers, not to tick boxes but to deliver value.
The State of Innovation report from The Unilever Foundry (Unilever’s platform for start-ups) predicts that within five years, all top corporates will be collaborating with start-ups. This is a big commitment and a fundamental shift so it’s essential you take the wider organisation with you – but don’t make this a procurement initiative, link it back to corporate goals.
The bedrock of innovation is to constantly question and challenge the assumptions – keep asking the question why? So why are you doing something you have always done and therefore why are you still getting the same results? Think differently and unlock the potential of innovation, to drive both efficiency and growth.
Download the CIPSMSDUK diversity white paper