Procurement Continues to Struggle With “Innovation,” says New Study
Putting a value on innovation is loaded with difficulty
Latest News
Port of Baltimore May Not Reopen Until Summer Sales & Operations Planning (S&OP) Mastery A New Priority Greets Procurement Professionals in 2024 Cargo Shipping Remains on Hold in Baltimore Following Bridge Collapse Maximizing the Bottom Line: The Power of Procurement More NewsLatest Resource
Sales & Operations Planning (S&OP) Mastery In this Special Digital Edition of Supply Chain Management Review, you will find insights on the importance of sales and operations planning (S&OP) to an organization’s bottom line.All Resources
According to research from George Smart, business development director at APS Group.
‘‘Part of this comes down to a culture of ‘short term-ism’ which sees departments focus on the immediate gains, such as cost savings. Long term goals are often secondary considerations, and, rightly or wrongly, innovation can often fall into this category.”
In an interview with SCMR, Smart says that putting a value on innovation is loaded with difficulty, however.
“But what we can do is look at how companies, like Philips, have successfully managed to work with suppliers to introduce innovation,” he says. “What we’ve learnt is there needs to be a commitment from senior management to see innovation happen. When this is the case, it allows procurement to confidently present a long term business case, as well as those short term savings.”
Finally, says Smart, when that high-level “buy-in”exists, procurement teams can start to assess their own processes and skill sets to ensure they are able to work closely with suppliers, and the internal departments that will benefit, towards a shared goal.
In terms of where price ranked when selecting a partner, almost one fifth said it matters more than anything else. The vast majority (83%), however, claimed that there were other factors which were more important. 56%, for example, said that they wanted a supplier that had a reputation for delivering on time and on budget.
The full findings are included in APS Group’s whitepaper: Putting a price on innovation: The procurement puzzle. This study highlights how multinational electronics company Philips is driving innovation through procurement. It also advises how other procurement professionals can achieve the same success.
About the Author
Patrick Burnson, Executive Editor Mr. Burnson is a widely-published writer and editor specializing in international trade, global logistics, and supply chain management. He is based in San Francisco, where he provides a Pacific Rim perspective on industry trends and forecasts. He may be reached at his downtown office: [email protected].Subscribe to Supply Chain Management Review Magazine!
Subscribe today. Don't Miss Out!Get in-depth coverage from industry experts with proven techniques for cutting supply chain costs and case studies in supply chain best practices.
Start Your Subscription Today!
It’s high time to go beyond visibility Driving supply chain flexibility in an uncertain and volatile world View More From this Issue