Exceptionally interesting document on the value of collaboration between an organization and its suppliers, resulting in co-creation. This surely has to be the way of the future. Nothing gets me more stressed than when I hear the word “vendor”. Its is a word that should be banned from our vocabulary. It certainly puts up the barriers, which is totally counter to Open Innovation thinking.
This document finds that accelerating innovation through effective supplier collaboration requires both an overall company wide innovation strategy and an integrated supply innovation strategy. An open innovation strategy requires executive leadership and culture change. This innovation strategy needs to be communicated internally/externally. Management must commit resources and processes (e.g. innovation portal and third party providers) to support the
strategy. Further, the innovation strategy must be linked to overall firm performance and assessed by objective metrics. Definition of innovation and establishment of innovation metrics requires a cross-functional consensus and alignment from top to bottom of the organization.
The innovation metrics with weightings based on innovation needs should be linked to company and supplier performance evaluation. Both hard and soft metrics need to be developed. Risk management strategies enhance the speed and likelihood of successful commercialization of new products. Risk must be defined as a combination of uncertain events and outcomes for both buyer and supplier during any new product development stage gate process. The companies should establish alternative plans if required innovation does not pass the stage gate risk/reward evaluation.