Open supplier innovation?


In class, it was stated that the best ideas in crowdsourcing come from people outside the topic or differently stated, without much knowledge on the good or service. In this post, I would like to take the opportunity to stress the influence of supplier involvement when discussing open innovation to generate ideas. Thus, using a different perspective, more B2B and upstream focused. Would it be helpful in idea generation to include knowledgeable suppliers?

In the article by Alexy et al. (2011), it was noticed that input delivered by suppliers was interesting as specific technical needs are known, resulting in higher quality ideas submitted. Therefore, concluding that signaling more requirements or restrictions to consumers could increase the number of valuable submissions. This could address an aspect also mentioned during the class, where companies (e.g., Philips and Dell) face issues with the quality delivered by submissions of the crowd.

First, supplier involvement can be considered as “the integration of the capabilities that suppliers can contribute to NPD projects” (Johnsen, 2009, p. 187).  A literature review by Johnsen (2009) states factors that successfully affect supplier involvement. The successful factors studied are supplier selection, supplier relationship development & adaption, and internal customer capabilities. These factors facilitate a shorter time for the product to enter the market as well as improve the product quality, and reduce development and product costs. More importantly, the review indicates that supplier involvement should be further studied in-depth as different thoughts on innovation related to the involvement of suppliers exist. Namely, the article states that existing suppliers could be too familiar with the product leading to limited innovation. Thus, in line with earlier mentioned, a ‘crowd’ without prior knowledge provides better solutions.

Later, a North American longitudinal study by Yeniyurt et al. (2014), specifically on supplier involvement in buyer’s NPD, indicates that among various aspects, buyer-supplier communication and suppliers’ trust of a buyer significantly influences the participation of a supplier towards co-innovation and supplier involvement in a buyer’s NPD. Furthermore, the study found that co-innovation as well as financial performance of both the supplier and buyer increases when suppliers are actively involved in the buyers NPD. Hence, more reasons supporting the involvement of suppliers when aiming to generate ideas.

A related business an example can be taken from the Unilever. In 2012, Unilever launched an ‘Open Innovation Submission Portal’ to collaborate with its suppliers. Currently, the platform is still perceived as successful and therefore, still operating and evolving (Procurementleaders, 2012; Unilever, 2017). The portal provides experts of certain processes to share and optimize products from their specialist or technical view.

All in all, I do believe that it is valuable for companies, aiming to be innovative, to include suppliers in generating ideas on product development. Not only to create submissions of higher quality, and a trustful relationship. Moreover, a broad and diverse crowd consisting of both consumers and suppliers might be optimal in order to include all viewpoints to generate the best value for the customer.

References

Alexy, O., Criscuolo, P., & Salter, A. (2011). No soliciting: strategies for managing unsolicited innovative ideas. California Management Review, 54(3), 116-139.

Johnsen, T., E., (2009). Supplier involvement in new product development and innovation: Taking stock and looking to the future. Journal of Purchasing and Supply Management, 15 (3), 187-197.

Yeniyurt, S., Henke, J.W., & Yalcinkaya, G. (2014) A longitudinal analysis of supplier involvement in buyers’ new product development: working relations, inter-dependence, co-innovation, and performance outcomes. Journal of Academey of Marketing Science, 42, 291-308.

http://www.procurementleaders.com/news-archive/news-archive/unilever-expands-supplier-innovation-project

https://www.unilever.com/about/innovation/open-innovation/

 

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