Letter to Supply Chain Professionals
The Supply Chain Profession is in a great moment in time. In just a few years the perspective has shifted from procurement to a much broader and strategic picture of how supply makes a vital contribution to a company’s competitive advantage.
We are in dynamic times. As we look into the very near future, the strategic value of key suppliers becomes increasingly more prominent.
Most importantly, in your supplier portfolio, the 80/20 rule prevails. Only 20% of your suppliers actually contribute to 80% of the value in the supply base.
When we look at the value paradigm, for these 20%, one of the most important contributions to your corporation’s value is INNOVATION.
In our work, in conjunction with the University of San Diego’s Supply Chain Management program, we’ve found that only a small percentage of suppliers are given the opportunity to provide innovation streams to their customers. This is primarily because buyers don’t expect or demand innovation from their suppliers.
However, that small percentage of buyers that want supplier innovation have a clear command over their competitors in terms of sales and profits. They have learned they cannot cost-cut their way to prosperity.
For all of you that are seeing the future of supply chain management as an ever-increasingly strategic job of managing competitive advantage, you will find the Engines of Innovation approach extremely rewarding.
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