How supplier collaboration can lead to growth and sustainability

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As B2B trends in globalization, digitalization, technology, information sharing and the events of 2020 have shown us, we need collaborative relationships and alternative supply chains if we want to ensure business resilience and growth. To support this with an integrated value chain we need to work more closely for growth and innovation, for sustainability, for diversity, for process improvements, and, of course, for cost optimization.

Enterprises large and small are realizing the extended gains to be had from collaboration, both with suppliers and partners, to bring an opportunity to drive synergies. Those might come from joint initiatives on R&D, expanding business reach that is not possible within their own confines, or working to optimize costs for the consumer. It is when they extend these collaboration models to more and more, perhaps tens of thousands, of suppliers that business capabilities increase.

This is a business model that is becoming not just more common but essential, and is one which needs managing as the number of suppliers we work with increases. Many firms seek technology that can help them cultivate and manage those alliances at scale:

Vodafone: supplier collaboration for innovation

Vodafone is an example of an industry disrupted by technology, having had to evolve from a telco company to a whole tech communications platform. To  develop alternative revenue streams from new products and services, it has created a partner innovation pipeline to enable it create a differentiated and tech-driven offering, supporting its implementation target of Europe’s largest and fastest 5G network by 2025, for example. They have used Vizibl’s partner collaboration platform to help standardize and gel those partnerships and formalize idea-generation in a collaborative workspace. Nadia Benabdallah, Vodafone’s Europe Network Engineering Director said: “We have replaced many tools and processes with Vizibl which has streamlined how we collaborate and engage with our key suppliers. It’s also scalable, which is important as we have a global supply chain. Because the platform consolidates all of our data in one place, it takes the team just seconds to learn what previously took hours or days. It gives us a level of visibility which we never had before.”‍

Sanofi: supplier collaboration for cost optimization

Sanofi is an example of a business that has had to refocus on cost savings to help return funds to R&D for better patient outcomes. To help become the customer of choice for strategic suppliers, to extract value from their extensive knowledge of the pharmaceuticals industry, their competitors and the marketplace, to have one place for collaborative idea capture and to scale their supplier collaboration programme beyond a small number of pilot suppliers, Sanofi also employed Vizibl. Stephen Cobham, Chief Procurement Officer of Sanofi said: “For Sanofi the value lies in the wealth of knowledge of our suppliers.” He calls this “bringing the outside in” which requires businesses to be more “open and humble” to recognise that they can, and should, outsource ideation (idea creation). “We need to be able to have much more robust dialog where we can use their power, their knowledge ... This paves the way for more meaningful relationships with suppliers, unlocking innovation potential that will ultimately drive growth.”

World-changing initiatives at Unilever

Multinational consumer goods firm Unilever is another forward-thinking enterprise that understands and is actively pursuing a partner collaboration approach. It is forging a world-changing initiative with a responsibility for sustainability, people and the planet. “In order to achieve our sustainable growth ambition, we must collaborate with our suppliers and partners, and the technology we use to facilitate that engagement plays a vital role,” explains Alexandra Tarmo, Head of Partnerships & Social Procurement at Unilever.

Tarmo’s role is to understand and improve how they engage with their partners. Having long-time recognition of the value of partnerships, Unilever has had a ‘Partner to Win’ strategy in place for the past 10 years which relaunched in 2020 as “Partner with Purpose” to adapt to today’s evolving markets and Unilever’s sustainability journey to deliver mutual 4G growth while doing good for people and the planet.

Sustainability commitments

Unilever has set out several long-term sustainability commitments. It aims to reach net zero emissions by 2039; to have a deforestation-free supply chain by 2023; to halve the amount of virgin, unrecycled plastic it uses and do away with more than 100,000 tonnes of plastic packaging by 2025. It also has many initiatives under its new Compass strategy to promote human rights, raise standards of living, health and well-being, and reduce poverty.

“I have spent all of my working life in procurement,” says Tarmo, “for me, supplier and partner collaboration has always been key, and now it’s more fundamental than ever. I believe that today if you don’t have that collaboration you are left behind as a function. The world has moved on from old-style procurement, from the ‘I win, you lose’ mentality; we now need to collaborate for mutual value, for efficiency, better processes, to share the same passion to optimize together and share the value if we are to achieve our ambitions.”

“To do that we absolutely need a new ecosystem of diverse partners (with a capital D). We will need to partner with new entrants, global companies, start-ups, universities, to deliver such an ambitious and forward-thinking agenda. Many of our existing suppliers will work within the ecosystem with us and with other types of supplier, some in one-to-one relationships, some in one-to-many. As a global company we have many thousands of suppliers in many countries and in many industries. Being part of this ecosystem is non-negotiable, and to be part of it means agreeing to our responsible sourcing policy and to our goals. Everyone who directly provides goods and services to Unilever must earn at least a living wage or living income by 2030, and realistically help us towards our carbon-neutral goal of 2039 — preferably before that.”

“So we are expecting our suppliers and partners to make commitments that mirror our own, including spending a certain amount with under-represented businesses.”

Unilever wants its suppliers to be part of that bigger, bolder picture, to collaborate on innovation and give back more value. They are currently running a pilot phase with Vizibl to help them towards this.

An ecosystem approach is essential to collaboration

“We are trialling the Vizibl platform to help create an ecosystem where more than one partner can collaborate to find a solution to a problem,” she said. “Historically it has been complicated for partners to work together because of the size and breadth of the organization. And as the Covid pandemic has shown to many companies, we are none of us as ‘data-ready’ as we thought. Many people have spent many hours exchanging data and preparing reports, so we have come to the conclusion that it is key to find a platform that will allow for ‘hyper collaboration,’ a single place where our strategic suppliers can share information, and to which we can invite more partners.”

“So for me, the Vizibl platform would be used to operationalize my Partner with Purpose engagement. We are looking at it to facilitate the operationalization of our common Partnership Growth Charter. By offering this tool uniquely to our PGC partners, we are demonstrating to them that we understand them, and making collaboration easier for them. Ultimately it will result in time saved, especially on the supplier side, add value and accelerate the pace of decision making and innovation.”

Collaboration for the whole agenda

“Collaboration has always been key to service and resilience,” says Tarmo, “but it’s only when you have constraints around accessing supplies, as was proved last year with the closure of factories, that you begin to realize that actually we need to collaborate for just about everything. You need to know that when you are in need, you are the first in line, because you’ve become a customer of choice.”

She would argue that the same applies to innovation. She believes that all resource is in fact limited, and that if you want your company to have the best minds, the best product, the best innovation, then you must be the first people they come to with a great idea — and that is arrived at through collaboration.

Similarly, when looking at the sustainability agenda: “the challenges are so big that they require us all to change what we do and how we do it. We need to rethink who we buy from (from ingredients to packaging), which tech to use, how we distribute and so on. This is not something any company can do on its own. We need our whole chain to be on that journey with us, it relies on collaboration across all suppliers.”

“Our ultimate goal is to do good for the planet and for the people on it. But clearly we need profitability and growth for both our company and our partners to achieve that. We can create value out of diversity — of companies, of people and models — so an ecosystem where they can come together to create solutions is becoming more and more important.”

 

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