Innovation Centered Procurement

Procurement must learn to adapt to the rapidly changing environment modern businesses operate in or risk becoming irrelevant.

It is not just about new tools, but about mind-sets and behaviours. Its also about monitoring developments in its external environment that impact their organisations ability to compete and therefore procurements ability to contribute strategically. These changes are about innovation, where technologies and changing geographic and social norms are evolving at increasing rates causing more volatility and uncertainty in companies and in the markets in which they operate.

Playing a key role in innovation is becoming increasingly important for CPO’s and anyone involved in procurement. Innovation represents a significant opportunity for procurement. So what should you do?

Here are our suggestions for the top 10:

1.    Get on the agenda and engage senior management
2.    Align supply chain priorities with the company’s growth priorities
3.    Increase visibility and contribution across the value chain
4.    Develop systematic processes to manage innovation sourcing
5.    Build upon existing collaboration capabilities
6.    Understand customer needs and look at innovative ways to satisfy them
7.    Harness new technologies, systems, processes etc faster than your competitors
8.    Leverage global networks -– internally and with suppliers and customers
9.    Challenge the status quo
10.    Contribute to the generation and evaluation of ideas

Jack Welch, retired CEO of General Electric, said,

“I am convinced that if the rate of change inside an organization is less than the rate of change outside, the end is in sight.”

It is highly likely the same principle can be applied to procurement. Failure to capture the innovation opportunity will result in procurement becoming irrelevant in the future.

Disrupt or be disrupted.

Nuff said …