- How to Develop a Business Strategy That Integrates Innovation Into Your Workplace
- 3 Things To Consider When Innovating Your Business Model
- Jumpstart Your Business With Innovative Products and Services
- 4 Questions to Ask Yourself to Improve Your Business Process Efficiency
- 7 Innovations To Get More Bang For Your Marketing Bucks
- Can New Technology Give You An Edge Over Your Competition?
- 3 Ways To Innovate Your Supply Chain
- Empower Your People To Unlock Your Innovation Potential
In the next post in our series – 8 Ways to Innovate Your Business – let’s look at how to innovate your supply chain and your outsourcing techniques.
This post is geared toward those that rely on other companies and manufacturers to provide end-products to their customers. It includes industrial and manufacturing companies but also knowledge sectors such as the public service which relies on relationships with other enterprises and contractors.
Even if you’re a small business that operates out of your garage, you may not realize the impact that an innovative supply chain can have. Even the pens that feature your business logo that you ordered online can be considered part of your supply chain network.
What is a supply chain?
You can think of your supply chain as the network, apart from your own business, that helps get your products to your customer. Consider that there are many links in the supply chain:
- Creation or extraction of raw materials;
- Production or conversion of raw goods to intermediate or consumable goods;
- Storing products in warehouses;
- Delivering products through logistic companies to retailers or directly to consumers; and,
- Selling final goods to consumers.
Those are just some of the common links in the supply chain – there may be others depending on the complexity of your product.
Often, every link in the supply chain is a different business or enterprise that both adds value to the product but also adds cost to you.
Three ways to get the most innovation from your supply chain
While every link along the supply chain adds complexity to the process, it also offers great innovation potential. At every step of your product’s journey to the consumer, you have an opportunity to innovate.
1. Be innovative in HOW you procure
If you procure products or services “down the line” of your supply chain, be sure to do so with an underlying framework that suits your needs.
You can develop a procurement strategy which will shape your priorities and make them known to your supply chain. If you value environmental impact and innovation, then you can build those components into your procurement strategy. Then, your contracting decisions will be guided toward companies that are committed to the components that you value most.
Or, build competitive processes into how you procure services in your supply chain. Make sure to get quotes and negotiate a good deal. Sometimes, being innovative is simply about being self interested and ensuring you get the best possible deal.
Last, be strategic in how you market and sell your requirements to suppliers. In this case, innovation is all about making sure the supplier wants to work with you, as well as vice-versa. Don’t think that just because you have a service proposal, every supplier will be begging for your business. You have to be innovative and continue to research and understand the marketplace in order to get the most from your negotiations and outsourcing.
2. Be innovative in WHAT you procure
You have to get creative when looking at all the available options in the supply chain. Often, it simply involves doing research and sourcing the most innovative products you can find that suit your business needs.
For example, if you have an e-commerce company, sometimes it’s not the most obvious and most popular manufacturer of your product that will lead to the best deal. Be creative and look at other sourcing options that may offer better products that are much more easily marketed or may better suit the needs of your customers. As a result, your products and services may stand out compared to your competitors and you can boost profitability.
To know what type of innovative products to source, you also have to listen to your customers to understand what you should provide them. We learned in an earlier post that revamping your product lineup can be a valuable way to innovate your business [link to 3. process]. The same applies to your supply chain – by responding to changing customer needs, you’ll need to stay innovative and adaptable to provide new and improved goods.
3. PROMOTE innovation with your suppliers
This last way to innovate your supply chain is the hardest one to accomplish. However, it may yield the best impact. We’re talking about promoting innovation from the external companies that make up your supply chain. It sounds simple but it can be a delicate process.
Every link in the supply chain can be improved with innovative practices, but making it happen is a different story. You don’t have direct control over the end-to-end process of other businesses. But that’s why you have to ask nicely.
- To work with suppliers, try creating brochures or digital material that explain your preference for innovative practices. When you begin work with a new supplier, ask about how they stay on the cutting edge of innovation.
- As part of the business requirements and the negotiation process, ask for an innovation plan about how that enterprise can be innovative in how they supply your goods or services.
- Promote innovation by managing relationships. It’s much easier to have challenging conversations with your suppliers after you’ve built trust and rapport with them. Be sure to emphasise that innovation can impact the returns that your suppliers receive because they can automate and improve their processes, too.
Making your supply chain work for you
Your supply chain isn’t always visible as you manage the operations of your business. It may rely on enterprises that operate in different countries and communicate in different languages.
A supply chain is complex and it’s common to neglect it as a source of innovation. That’s why it’s important to reflect on the three methods, above, in order to maximise the innovation potential from your supply chain. Doing so can help your business stay ahead and outlast competitors as well as add better value to your customers.
Want to know about innovation? In the next (and final) post of our series – 8 Ways to Innovate Your Business – we’ll look at how to promote innovation in your employees and workplace culture .