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

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Philips' High-tech Campus office highlights importance of working cross-functionally

A recent visit to Philips’ office at the Hi-tech Campus in Eindhoven revealed how cross-functional collaboration is at the heart of the company’s supplier innovation strategy

Philips hi-tech campus

Last week, the Supplier-Enabled Innovation Center held its second Accelerator Program of the year at the Philips’ High-tech Campus office in Eindhoven. The campus claims to be the “smartest square km in Europe”, and it isn’t hard to see why.

 

Walking through the location – which more closely resembles a university than a corporate space – you can’t turn a corner without glimpsing scientists, innovators and others busily collaborating and sharing ideas.

 

In fact, my main takeaway from being on campus was less the impressive technologies being worked on, and more the sense of collaboration that the space encourages. You could be forgiven for wondering why procurement would even be at a location that so obviously focuses on R&D and innovation, but its presence there is representative of Philips’ evolving business culture, and the position that procurement now occupies in the company.

 

“Procurement has become the orchestrator that brings together different functions to work on solving problems,” explains Maurits Smits, Philips’ VP of procurement and the man behind the company’s Design for Excellence (DfX) program.

 

Achieving this didn’t take place overnight. “You can’t go to each function and just say ‘we’re going to orchestrate the business’,” says Smits. “It was a process that had to be done project-by-project. Four years after starting DfX, we’ve completed over 850 such projects cross-functionally, showed we’re capable of adding value and improving speed, and have the respect of other functions as a business partner.”

 

This level of cross-functional support and cooperation is what makes procurement such an indispensable part of the Hi-tech Campus. And while this status is something that any procurement function pursuing Supplier-Enabled Innovation strives for, few accomplish it. Even some of the more mature players in the SEIC struggle with convincing other departments of their value as a business partner and, despite taking giant steps in SEI, are stuck with their reputation as a cost-saver.

 

It was therefore inspiring to see first-hand how representatives of procurement fit into Philips’ business. Smits’ team works hand in hand with R&D, finance, marketing, and other departments to identify challenges and find solutions for them. It sits in the same office as these functions, attends the same meetings, and sometimes even reports to the same stakeholders.

 

The relationship between procurement and Philips’ other functions is further reflected in the makeup of its team. Where five years ago it was comprised entirely of procurement competencies, today it is filled with staff that have R&D, marketing, and consultative skills. Smits himself is a product of this shift, having first worked in Philips’ R&D department for 25 years.

 

And this is where supplier innovation comes into play. Getting to this point and attaining this level of trust, Smits says, has equipped procurement with what it needs to pursue SEI.

 

The message here for other companies eager to develop SEI is that enjoying cross-functional support underpins supplier innovation. Having it has empowered Philips’ procurement team and accelerated their journey as a value driver for the business – something that is, of course, a core aim of SEI.

 

The first step for emulating this model is for procurement to support other functions in areas where it wouldn’t ordinarily spend its resources. This is a key way for procurement to chip away at its reputation as a cost-saver, and then take on a role that allows it to truly unlock value across the business.

 

Samuel Wrest

 

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