Guides to Innovation at Scale: Innovating with Suppliers

Creating a truly scalable innovation program requires the optimization of every element of a company’s operation that is geared towards improvement. A business’s customers, internal employees, and external members of an open innovation network all rely on this community.

Suppliers should also form a key consideration as part of the success of an organization’s innovation strategy. In this guide, we’ll explore what it means to innovate in partnership with suppliers, how a company can take on both sides of that relationship and share some reasons why it’s an important thing to get right.

What is Innovating with Suppliers?

Let’s begin by looking at exactly what is meant by the practice of innovating with suppliers. As Oliver Wyman put it in 2019:

“Supplier innovation is about leveraging the innovation power of the supply base in a systematic way to increase one’s own innovation performance.”

At a more basic level, it is the exercise of treating suppliers like any other collaborative, innovation community. It is about involving a business’s suppliers in conversations around solutions to existing problems, developing new products or services, and getting vital validation that that a new development is taking the company in the right direction.

Why a company should be innovating with Suppliers:

With the practice now more readily understood, let’s move on to look at some of the benefits that a company can enjoy from engaging with its suppliers on innovative practices. Having run many Challenges over the years at Wazoku, we’ve seen supplier involvement increase the value of an innovation strategy for a number of our clients.

Some of the ways in which this manifests include:

  • Attracting new suppliers to come on board
  • Cross-pollination of ideas between an eco-system of relevant suppliers
  • Educating suppliers as to current and future pain points faced by an organization
  • Fostering collaboration across the network, leading to a more harmonious, focused way of working
  • Greater brand visibility for the organization across its supplier network as it offers insight into how the company operates.

How to Innovate with Suppliers:

A great way to get started on the journey of innovating with suppliers is to have a space – preferably online – where the suppliers can access and engage with your team. On the Wazoku platform, we offer this in the form of an open community. Having this allows a business to outline its stated aims and goals, so that suppliers can take that information on board and suggest ways in which it can help.

Clients of ours – such as ESB of Ireland – have found this to be a great resource when seeking improvements from its supply chain. The community that it operates offers insights into how the business is set up, what it is looking to achieve, and how a supplier can get involved.

Having this one-stop-shop makes managing the process of innovating with suppliers significantly easier than attempting to do something similar without it. However, It is likely that businesses both have suppliers and are suppliers in turn – of goods or services to other companies. Now, we’ll take a look at how to approach innovation as a supplier.

How to Innovate as a Supplier:

When on the supplier side of the fence, there are a number of things that an organization can do to demonstrate to its customers that it is proactive, innovative, and never satisfied by providing the same service all the time.

Where we’ve seen this work well in our experience involves Challenges run in two different ways. The first is an Innovation Exchange, and the second an Innovation Campaign. Below, we’ll discuss what these are, how to do them, and why they deliver great value.

Innovation Exchange:

  • What is it? An innovation exchange is an avenue through which a business can supply its customers with solutions to problems that it has the power to resolve.
  • How is it done? By setting up a community online as a supplier (something that the Wazoku platform enables), an organization can capture, evaluate, and prioritize improvements to existing issues faced by those it supplies to.
  • Why do it? The gains for innovation exchanges aren’t just the obvious short-term effects of overcoming a problem. Being proactive here allows a company to bring this as a point of difference to future bids and renegotiations with its customers, by highlighting its innovative nature.

Innovation Campaign:

  • What is it? This is about a specific issue being faced by a customer that a business – as a supplier – can focus its energy on resolving.
  • How is it done? Once again, this can be run through the Wazoku platform, but is run as a more time-sensitive manner. This enables an organization to utilize its entire hive mind and produce a solution that addresses a customer pain point directly.
  • Why do it? Running an innovation campaign in this way allows a business to position itself as considerate and receptive of its customer needs. It allows for the demonstration of commitment to a customer that can make future deals a lot easier to acquire.

Conclusion:

In this guide, we’ve taken a look at the process of innovating with suppliers. Having outlined what the process is, we’ve also demonstrated why it should form a key pillar of any business’ innovation strategy. Lastly, we’ve viewed the relationship between supplier and customer from both angles, showing how one company can operate both positions simultaneously.

Everything discussed in this series of guides on Innovation at Scale covers an element of a greater overall picture. Galvanizing the support for an innovation program from all of the crowds that a company deals with is vital to underpinning scalable, sustainable innovation. Innovating in this way brings improved results, with supplier innovation providing another crucial piece of the puzzle.

About Wazoku: Wazoku is a pioneer in open innovation, crowdsourcing, and innovation at scale. For more than two decades, we’ve been helping our clients deliver sustainable and scalable innovation practices. As both for-profit and for-purpose, our software and expertise have been used to gain competitive advantage and overcome humanitarian crises around the globe, all of which are underpinned by the belief that anyone can be an innovator.