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

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Our Diagnostic Tool provides a gap analysis of SEI capability to support the strategic planning process

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

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

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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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Our Capabilities Assessment tools provide the means for organizations to gain insight into their own SEI approach

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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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Driving needs identification in Supplier-Enabled Innovation

Innovation is often derived from an internal need not yet met. In SEI, there’s little that’s more important than understanding these needs and linking them to supplier capability

Needs identification

 

The most effective supplier innovations are those that address an identified business need. By solving an internal challenge with a supplier solution, the value of working collaboratively with external parties is instantly realized in a business.

 

Positioned in-between internal stakeholders and suppliers, procurement is perfectly placed to link these business needs with external capability – but which areas should procurement focus on to drive successful needs identification?

 

An inside-out approach

 

The answer will naturally vary from business to business, but for one company in the F&B industry that the Supplier-Enabled Innovation Center (SEIC) recently spoke to, needs are closely linked to market growth potential.

 

Solutions that this company are searching for fit into five needs segments as part of its wider SEI framework. “Each of these revolve around a part of the market where we see potential for growth,” its General Manager of Procurement says.

 

Gifting and millennials are two examples. “Each are areas where our products currently have access, but where there is still room for expansion. Accessing an innovation that can help us make further inroads into these areas would be highly beneficial for the business.”

 

Identifying these areas is very much a collaborative effort. The GM’s SEI team coordinates with the company’s senior management, as well as with sales and R&D. These stakeholders funnel their needs and challenges to procurement, who then incorporate them into their needs identification roadmap.

 

In addition to helping procurement solidify its SEI strategy, establishing these segments has another advantage: it clarifies the company’s needs to its suppliers, allowing them to understand the types of proposals they should be working on.

 

“A shotgun approach where we simply say ‘we’re looking for innovation’ isn’t specific enough and won’t get us anywhere,” the GM says. “By communicating a handful of areas where we’re looking to develop the market, we’re more likely to gain viable solutions.”

 

Bringing in an outside perspective

 

Integral to a successful needs identification strategy here, then, is to develop an innovation plan that addresses market opportunities and loops in relevant stakeholders. But this shouldn’t necessarily be restricted to internal stakeholders.

 

“Bringing in the views of external stakeholders – including our suppliers and other third parties – is an important part of our needs identification strategy,” one SEIC member says. “It creates a window to wider market trends and how they might impact the strategic focus of the business.”

 

This is a view shared across several other procurement functions, with the highest performing businesses we’ve worked with in the SEIC also tending to bring an outside-in view to their needs identification. Because of the fresh perspective they bring, suppliers, consumers, and third-party consultants – amongst others – are all seen as having the potential to identify new, previously unseen needs. A business doesn’t know what it doesn’t know, after all.

 

There are several ways in which this can be organized. Some companies participate in quarterly or half-year sessions that are used to refresh company focus areas, bringing the insight and perspective of suppliers and other third parties. Others are less formal, suggesting simply that "regular external stakeholder meetings" are used.

 

But regardless of the method chosen, the message here is that a holistic approach to needs identification – where procurement pools the requirements and ideas of both internal and external stakeholders – is key to its success. For procurement functions committed to driving value to the business through supplier innovation, developing a focused and inclusive roadmap of these business focus areas should be a priority.

 

Samuel Wrest

 

This content is produced by the Procurement Leaders’ Supplier-Enabled Innovation Center (SEIC). To learn more about membership to the SEIC, please email us.

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