Moving vendors from order takers to strategic innovation providers (Procurement Foundry Special)

When someone recently asked me what I thought about the idea that there is a need for suppliers to become more strategic and innovative, I came to the proverbial fork in the road.

Down one road which like a pathway after a bad storm that is strewn with debris, I saw the potential obstacles originating in the way that procurement had previously worked – and sadly, in far too many cases still does. Specifically, the adversarial nature of the relationship between buyer and seller, where, as a notable author, Kate Vitasek, once put it during a lecture she gave, there is a clear winner and loser.  Talking with Kate afterward – we have become good friends since then, she recounted how Microsoft used to provide her with incentives for squeezing as much as she could out of a supplier. As she will readily admit, this is hardly the basis for forming the kind of relationship that leads to more significant innovation. There are, of course, other obstacles, but you get my point.

The Second, Less Travelled Road

I love the Robert Frost poem “The Road Not Taken,” and what it symbolizes. No, this isn’t going to be an article on a classic poem from 1916. However, in the context of moving vendors from being order takers to strategic innovators, the road less taken requires a shift in procurement’s traditional mindset. Some may find it difficult to accept; moving from a transactional relationship with suppliers to one that is relational.

Let me give you an example of what I mean when I say relational.

A few years ago, I moderated a panel discussion in which the then head of Spend Matters UK Peter Smith was a member. While there were many great insights from the panelists, the one that stood out the most was Peter’s story regarding how the ubiquitous upside-down Heinz ketchup bottle came into existence.

Smith told of how the bottle idea originated with a Heinz supplier, and in partnership with the company’s procurement department, was “championed” to upper management. At the time, I remember thinking to myself how many of the listeners tuning in to the broadcast would have “linked” a product innovation with procurement? I then went on to suggest that for a similar collaboration to occur with higher frequency, procurement professionals must begin seeing their roles in much different light than they did at that time. Or to put it another way, we have to as a profession collectively make a conscious and concerted effort to choose the less traveled road that involves proactive collaboration and transparency in which the term win-win is more than an unrealizable sentiment.

Use the following link to read the rest of this article, and while there, check out the many other interesting articles and resources on the Procurement Foundry site.

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