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SRM: Harnessing supplier innovation to unlock multiple sources of value

09/28/2021 By

Organizations are increasingly adopting a triple bottom line (TBL) framework to create wider business value from social, environmental and financial interactions — partly because external pressures demand it and partly because the time has come when considering the greater good weighs heavily on the business-conscious.

The juxtaposition is that while the tri-part TBL commitment to profit, people and the planet emerges, it does so at a time when product lifecycles are shortening and supply chains are lengthening, therefore increasing in complexity and volatility. The way around this predicament lies in digital innovation.

For businesses, and manufacturers in particular, the need to innovate at speed has not been greater. And as the business world progressively comes to terms with this need, it recognizes that the best source of innovation comes not wholly from within its own four walls, but from a most valuable external source — its suppliers. To benefit from this partnering fully, an organization’s need to manage supplier relationships is rapidly increasing in importance. We’re seeing instances of supplier innovation that support multiple strategic priorities that go way beyond a company’s core product development. To tap into these efforts, a supplier innovation model and underlying supplier management competencies are essential, so that priorities are aligned and supported.

We explore this model and required management competencies in depth in a recent white paper authored in collaboration with Oracle, “Making Supplier Innovation Deliver to Manufacturers’ Triple Bottom Line,” by our Chief Research Officer Pierre Mitchell. This Spend Matters PRO brief excerpts the highlights and provides a framework to help understand how to move from transactional supplier relationships to achieving SRM Nirvana.

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