The 8 Modules, 31 Focus Points and 5 Collaboration Phases of the SEIC Methodology provide a path to success

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In-depth explorations of the approaches and techniques used by leading organizations in the field of SEI today

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Insight calls are available to join for all members of the SEIC and will be addressing a number of topics

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The 11 modules of the SEI methodology focus on the key processes that enable the successful rollout of SEI

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In-depth explorations of the approaches and techniques used by leading organizations in the field of SEI today

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Thought leadership and insightful articles on the most important issues for companies pursuing an SEI agenda

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Useful downloads, from unique research to practical templates, frameworks and tools being used by SEI leaders

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Kill ideas and know your suppliers' R&D budget allocations

Discovering how much of a supplier’s R&D budget is allocated to a buying company can inform SEI’s supplier selection process, according to a recent Procurement Leaders’ workshop

PL-Europe-Forum-2017

To Amsterdam and the Procurement Leaders Europe Forum 2017, where I hosted an interactive workshop on Supplier-Enabled Innovation, and what procurement can do to improve its value proposition to the business.

 

We focused on just a small number of questions:

  • What is your biggest inhibitor to innovating with suppliers and how can this be overcome?
  • How do you measure the effectiveness of a supplier-innovation program, and is measuring success important?
  • Who are the key stakeholders in your organization from a supplier-innovation perspective, and how can you engage with them more successfully?

We had an hour, but could have spent much longer talking through these challenges. In fact, we didn’t have time to even touch on the third of the three questions, simply because the conversation was flowing so well.

 

But let me touch on a few of the points raised.

 

First, on inhibitors, we covered a wide range of issues – from the infamous ‘not-invented-here’ syndrome, to (the related) issue of R&D or other business functions being inherently conservative and resistant to change.

 

I believe that responsibility for this lies squarely at procurement’s door. It is the sourcing function that must convince these key stakeholders that suppliers have access to technology and capability that can contribute significantly to strategic goals. This is best solved by engaging at senior level (and if possible, board-level) within the organisation to drive the message home.

 

A good example can be seen at SEIC member, Husqvarna, which enjoys CEO support for its SEI program. Similarly, Johnson & Johnson Consumer’s chief technology officer Josh Ghaim is a huge proponent of SEI.

 

Other inhibitors that were raised during the short discussion included:

  • The capabilities of procurement staff being ill-suited to pursuing an innovation role (a common issue)
  • Debate about whether procurement should be driving this (yes it should)
  • The long-term nature of SEI being at odds with traditional procurement (this is certainly an issue, but one that can be addressed through governance)
  • A lack of focus (focus is a key requirement of successful SEI)

While there is nothing especially surprising with the inhibitors to SEI that were raised during the workshop, the second quick-fire discussion we had was focused on metrics, and how to successfully measure success – if indeed measuring success is required.

 

Here, a couple of takeaways are worth mentioning.

 

First, one participant talked about the value of measuring the number of killed ideas. The natural approach might be to do the opposite and record the number of successful or current projects – but counting killed projects/ideas certainly adds another lens and provides insight into the effectiveness of both the ideation and screening phases.

 

But the second takeaway I had was how another participant calculates the percentage of their R&D budget that key suppliers allocate to the buying company.

 

The concept came up in discussion, and I asked the room how many did so – just one hand went up in a room of about 40 (the ratio didn’t surprise me). When I asked that person how he calculated the figure, the answer was simple: “We ask them”.

 

Now, he was accepting that his organisation had to take the answer with a pinch of salt and that not every supplier was as forthcoming with an answer as the next, but it struck me as a very simple, but quite novel approach. Equally, such insight can become an illuminating part of the overall jigsaw and one that can contribute to an advanced supplier-segmentation process.

 

Successful SEI is about juggling many balls, with one of the most important knowing which suppliers to embark on deeper, more meaningful relationships with. However, by understanding the percentage of their R&D budget you have access to, the decision suddenly becomes a little bit more straightforward.

 

David Rae

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