Tomorrow's Manufacturer - Effective Co-Innovation

20 May 2010

Dan Hawker

Dan Hawker

Former Head of Tobacco, Wholesale & Retail

I have been discussing the Tomorrow's Manufacturer key themes with various people, and one conversation in particular stands out. I asked out of all 8 areas, which one did the person think was the most important. He thought for a while, and then said "Innovation. If we don't continually innovate, we will eventually die out".

This must be true for any manufacturer in higher-cost economies - particularly as companies in lower-cost economies are also starting to compete on innovation - companies like Huawei of China for example. Huawei would have been lucky to get into the top 100 list of suppliers to most major telecoms providers even as recently as 5 years ago. Now they are in the top 5 of many of them.

I also have an interest in Procurement, because of my background. One of the key themes in Procurement over the past 3 years has been Supplier Relationship Management. The idea that purchasing professionals should in some cases put away their price-bashing baseball bats when going to visit a supplier about a requirement, and start to look at them as a partner to develop a trusted relationship with. John Henke has done research to suggest that "Trust" in a supplier-customer relationship can result in revenue growth on the part of the customer, not just cost reduction. Why? Because if a supplier trusts you, they are more willing to invest in the relationship, more willing to take risks for you, and importantly, more willing to give you a greater share of their innovation.

With the fragmenting of supply chains, and increasing globalisation, co-innovation is becoming ever more important.

Of course, involving third parties in innovation would tend to increase lead times. So it will be interesting to see what good looks like, in terms of harnessing the discretionary effort of suppliers in the innovation process, and at the same time, accelerating the time to market.

View comments

Comments

Blog post currently doesn't have any comments.

Bluefin and SAP S/4HANA - welcome to the one horse race

We use cookies to provide you with the best browsing experience. By continuing to use this site you agree to our use of cookies.