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Partnering for Innovation

Author(s):

Ron Wilson, CPSM, C.P.M.
Ron Wilson, CPSM, C.P.M. is CPO for Wilbur Curtis Company in Montebello, California.

September 2012, Inside Supply Management^® Vol. 23, No. 7, page 8

Out In Front: Leading People, Leading Organizations
Establishing well-placed partnerships can lead to innovation gold for supply management professionals.

The adage "two heads are better than one" is more than just your mother's favorite mantra. It's a philosophy that can be followed in supply management with positive results. Partnerships in today's business environment embody the meaning of the popular adage and expand upon it for the mutual benefit of all parties. A partnership is defined by the ISM Glossary of Key Supply Management Terms as a close relationship between a buyer and seller to attain some advantages from each other in a positive way. And many supply management organizations today are reaping the rewards of strong partnerships.

I believe the foundation for building supplier partnerships starts with a supply management executive team that fosters an environment conducive to supplier alliances. The team provides strategic direction to help supply managers identify opportunities for supplier collaboration. Support and sponsorship by the team helps keep the goal in focus and provides the needed resources to be successful. The team's leadership greatly enhances the partnership strategy process and helps steer the partnership in a specific direction. A deep and lasting supplier collaborative partnership provides many benefits to the supply management organization and the overall company, including:

• Product and process improvements
• Lead-time reductions
• Cost reductions
• Increased business opportunities.

Suppliers can be great partners, and instrumental in helping a company realize breakthrough innovation and positive results. Cutting-edge products, processes or services can be brought to the relationship by either party or developed through mutual collaboration between supply management and strategic suppliers. After all, most suppliers are more than willing to establish a partnership — provided there is a benefit. Depending on the partnership or collaboration, executive supply management leadership is essential because issues such as intellectual property ownership and patents will need to be addressed.

Partnering for Results

In a partnership effort, the supply management executive is an integral link with the company's executive management, the supply management team and suppliers. The supply management executive needs to establish a direct, honest link to his or her counterpart at the supplier's organization. The relationship must grow into one that both parties believe in and trust because it will require both parties to share information — often confidential in nature. Each party must understand the abilities and expertise of the other.

Suppliers are experts on their own products and services, serving as valuable information sources for supply management personnel. Their knowledge is detailed and complex, and they often are more aware of the latest technology and breakthroughs in their particular field. Suppliers can bring this expertise to the business relationship in the form of ideas, products and services, thus making it unnecessary for supply managers to "re-create the wheel" by using the fruits of their suppliers' efforts, knowledge and experience.

Depending on the depth of the partnership, unique applications can be developed by the supplier solely for your company's product — an important reason why supply management executives should nurture these types of relationships.

At Wilbur Curtis Company, for example, we developed such a partnership with a printed circuit-board supplier to help create and launch innovative and unique product offerings. With the help and expertise of our supply partner, Wilbur Curtis was able to bring state-of-the-art equipment with touch-screen technology to the commercial coffee, tea and specialty beverage market. The supplier also was able to assist us with encapsulating boards to make them resistant to steam and water, improving the quality and longevity of the brewing equipment.

Reaping the Benefits

Wilbur Curtis discovered that developing a strong partnership with its supplier yielded more than the expected benefits. Multiple opportunities and advantages were realized and additional projects materialized from the initial partnership. Faster inclusion of significant product modifications launched products to market in record time.

Today, the supplier that partnered with the company on our touch-screen technology project has become an extension of the Wilbur Curtis engineering team and is considered a part of our organization. This supplier participates in our design review meetings for new and existing products. Circuit-board design and development is now done by the supplier, in lieu of the Wilbur Curtis engineering team, and prototyping and testing is done by the supplier at both its own facility and in the Wilbur Curtis labs. The supplier has ad hoc staff at Wilbur Curtis as the need arises. I believe our strategic planning is enhanced by having direct input from the supply partner.

The integration of a strategic supply partner into the supply manager's own organization can generate a powerful dynamic. Supply managers need to foster this type of association to help drive innovations through their organizations. To make this happen, supply management executives must take the lead in this endeavor. They must continue to demonstrate the importance of their role within the organization and their contribution to the overall success of the company.

For more information, send an e-mail to author@ism.ws.

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