Innovation is critical to the survival of most companies, given the increasing pressure from stakeholders to generate higher revenue, deliver better quality products and services, and minimize cost.
In the days when companies were much more vertically integrated, the
R&D needed for new processes, products or services was conducted in-house. As companies have become more specialized and outsource many
tasks, they have relied on their supply base to provide some or much of
their innovation needs.
CAPS Research, a program jointly sponsored by Arizona State University and
Institute for Supply Management® (ISM®), funded our project to understand
how buying organizations could better assess and manage supplier
innovation. We examined a variety of academic and corporate sources, as
well as surveyed and interviewed professionals at CAPS Research member
organizations to understand how supplier innovation is measured and
WHAT IS SUPPLIER INNOVATION?
Supplier innovation is a process where drivers (supplier pushes and buyer
pulls) lead to outcomes. In the case of supplier push, a supplier innovates
and attempts to sell that innovation to a buyer. For example, software
producers often update their features and functionality, and buyers can
choose to adopt these new versions or innovations. In the case of buyer
pull, a buyer requests a supplier to solve a problem, and the solution
requires an innovation.
THE INSIDE STORY
BY TINGTING YAN, PH.D., AND KEVIN J. DOOLEY, PH.D.
With companies more reliant on suppliers for new
or enhanced products, features and processes, a
management program can help determine which
ideas to tap.