Importance of Innovation in Procurement

Importance of Innovation in Procurement

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Procurement is an important function that leads the way to organization-wide innovation. It is the procurement professionals who are accountable for determining and selecting innovative vendors (which steer the process and product development), discovering new methods to create value for the company, and working alongside a myriad range of internal and external stakeholders.
Adopting innovation and a “thinking outside the box” psyche enables you to reduce costs, increase productivity, solve business problems, strengthen your brand’s reputation, and give an organization a competitive edge.

Top 4 tips for procurement professionals to drive innovation internally and with the suppliers.

1. Relationship Building:

Business leaders today are very well aware of procurement’s importance and, as a result, look to the function to lead on innovation. But that doesn’t mean they’ll give your ideas the green light without a thorough review.

You’ll need to construct trusting and lasting relationships with these stakeholders, be sure that you comprehend their overall business aims, and convey your ideas and the challenges they will address.

2. Targeted Innovation: Delivering Customers What They Want?

For sourcing leaders, this means that they first have to identify who their customers are, and what they desire. For example, your key customers might work in your organization’s engineering function, and their key “want” is to get the parts they require from the vendors faster.

Your efforts must, therefore, be dedicated to working with the vendor to find innovative ways to enhance supply chain velocity.

3. Promote Intrapreneurship:

To address this point, procurement leaders must promote and adapt intrapreneurship, which means fostering an environment where employees can function as an entrepreneur within their organization or the team.

It is a chance for employees to apply practical skills which are often unapplied, be self-motivated, and approach business challenges in unique ways.

4. Measure Innovation:

The conclusive step to driving innovation is to measure and analyze your progress. It’s might be not the easiest aspect to set clear metrics for but could include summarizing the objectives related to sustainability, and CSR Policies.

It also includes determining critical challenges that could be overcome through innovation. You must also record and review the progress made and lessons learned along the way. These measures will assist you to construct a long-term, innovation-based culture.

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