Procurement in 2020: Creativity and Innovation (Sourcing Ideas)
Categories: Procurement Commentary, Procurement Strategy & Planning | Tags: L2, Process and Best Practice
It’s not too often that two of the top words people associate with procurement are “creativity” and “innovation.” Rather, terms such as “savings,” “negotiation,” and “compliance” are more likely to come to mind. Yet for procurement in 2020, as Deloitte explains in their paper, Charting the Course, creativity and innovation will rise to the vanguard of international capabilities and requirements for effective teams. The paper’s authors frame the discussion with a thought that is at once simple yet remarkable.
Specifically, by 2020, procurement will not be just “the group that focuses on sourcing raw materials, goods and services, but rather [one] sources ideas.” As such, “Creativity will involve engaging stakeholders in new, innovative ways (not just delivering new capabilities to the business through external resources).”
Granted, we have a long way to go, as “impacting ‘make vs. buy’ decisions and blurring the line by providing capital investment, technology and generalized IP investment with tier one suppliers and contract manufacturers is something that only a small subset of leaders are engaged in today. ” But this “will likely change in 2020 and become one key performance indicator for measuring creative procurement. For example, this could take the form of regularly sharing R&D resources and co-creating new intellectual property that ranges from radical shop-floor productivity improvements to new product innovation.”
The thought of creativity and innovation being at the center of procurement competencies will no doubt require a shift regarding “who does procurement” as well as the expectations of the business and management around measuring overall functional effectiveness. But done right, procurement will no doubt become as important as internal R&D is in select companies when it comes to matching ideas and capability to ultimate customer interest and demand.
This post is based in part on content from Charting the course: Why procurement must transform itself by 2020. If you’re interested in learning more about how analysts see the future of procurement and supply chain, register for our upcoming conference, Commodity/PROcurement EDGE.
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