Innovation Sourcing - The Suppliers’ Perspective

This is an excerpt of the original article. It was written for the November 2011 edition of Supply Chain Management Review. The full article is available to current subscribers.

November 2011

Innovation. It’s a hard competency to come by. Can schools teach you to be innovative? Is work experience really the only way to open your eyes to what’s possible? Or is the innovative spark something that lurks in an individual’s DNA—and you either have it or you don’t? Innovation. It’s a hard competency to come by. Can schools teach you to be innovative? Is work experience really the only way to open your eyes to what’s possible? Or is the innovative spark something that lurks in an individual’s DNA—and you either have it or you don’t? Innovation has worked in the Gambia situation and in supplier sourcing. Surely, there must be…

Browse this issue archive.

Already a subscriber? Access full edition now.

Need Help?

Contact customer service

847-559-7581   More options

Not a subscriber? Start your magazine subscription.

Innovation of products and services has become an increasingly important strategy to achieve competitive advantage. Cisco, IBM, Philips, Procter & Gamble, and Whirlpool, to name just a few leading companies, have identified innovation as a critical strategy that will enable their future growth and profitability.

Prominent academics C.K. Prahalad and R.A. Mashelkar argue that, following the severe economic downturn, innovation is making a comeback as a high priority corporate strategy. However, traditional approaches to and views about innovation are changing dramatically. “Open innovation” is one strategic approach being implemented by rms across multiple industries. Procter & Gamble popularized the open innovation approach through its “Connect + Develop” efforts, whereby it established a goal of attaining 50 percent of its revenues through external innovations over a five-year period.

Open innovation maxims include:

• Smart people work at other companies as well as our own.

• External R&D can create considerable value and internal R&D enables capture of some of the value.

• Research does not have to originate internally for a company to profit from it.

• Those that make the best of both internal and external ideas will win.

• Companies can profit from others using their intellectual property (IP); at the same time, they should buy others’ IP whenever their own business model can be advanced.

Within this changing environment, CAPS Research undertook pioneering research aimed at answering a fundamental question: What supply strategies can be used to identify, select, and effectively collaborate with suppliers to accelerate and achieve supplier innovation?

The primary source of data was 77 in-depth interviews with innovation leaders in worldwide companies from the automotive, industrial manufacturing, electronics, food and beverage, and telecommunications industries as well as their key suppliers. The research focused on identifying innovation opportunities and companywide approaches to achieving supplier innovation. Extensive interviews were conducted with key leaders representing innovation, engineering, technology, sales, product development, and purchasing from both purchaser and the corresponding supplier functions.

This complete article is available to subscribers only. Click on Log In Now at the top of this article for full access. Or, Start your PLUS+ subscription for instant access.

Not ready to subscribe, but need this article?
Buy the complete article now. Only $20.00. Instant PDF Download.
Access the complete issue of Supply Chain Management Review magazine featuring
this article including every word, chart and table exactly as it appeared in the magazine.

SC
MR