SEI could enhance innovation for your business' future! Are you ready?

About 2 months ago, during a night out in the city, a friend of mine suggested grabbing a hotdog from a KorvKiosk.

Considering my soft spot for processed meat I half-reluctantly agreed. Approaching the Kiosk he asked me what I wanted and proceeded ordered us two “korv med räksallad” (hot dog with shrimp salad).

I was confused. I didn’t ask for shrimp salad on my hotdog, but he ordered it anyways. I was skeptical, but it is a rather customary in Sweden. So, I bit my tongue.

I haven’t had a hotdog without shrimp salad topping since that night.

This is a stretch, but in some way shape or form, my friend was showing me something rather innovative in my eyes. Without his initiative, and my trust that he wasn’t going to order me something terribly dissatisfying, I never would have tasted one of the finest innovations to come out of Sweden; right behind the zipper, three-point seatbelt, and pacemaker.

Long story short, a hotdog inspired a blog post about procurement.

Full Article: How a Hot Dog inspired a post about Procurement

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Supplier Enabled Innovation is a quickly emerging topic, in the supply chain community, amongst top procurement professionals. Yet, its importance has had difficulty receiving the notoriety it deserves.

Many companies have taken notice to the importance and digitalization of SCM, including SRM (Supplier Relationship Management) for a means of creating collaboration in the buyer-supplier relationship. However, taking these relationships to a level of collaborative and innovative performance is the real challenge afoot. Current buyer-supplier relationships contain compliance, governance and quality control to create transparency within the relationship and for concerned stakeholders.

These are measures taken to strengthen strategic, brand and operational values within corporations globally.

With that being said, I believe it’s time SEI joins the discussion. It is a means of creating mutually beneficial profitability and sustainability in the supply chain, and it must be treated in that manner.

But first, it’s potential must be understood.

What is SEI (Supplier Enabled Innovation), really?

SEI is a disruptive alteration of traditional procurement, as we know today.

At its roots, SEI is a mode for increasing the volume for research and development of any and all innovations, which happen within their supplier pool. This is a functionality, which could potential take procurement from being a means of risk assessment to a means of competitive edge. (Procurement Leaders)

But let’s not forget, this is a collaborative process.

“The suppliers themselves have in the most part always been innovative. They have to be in order to remain in business and increase their market share. The trick however for companies at the top of the supply chain is recognizing this innovative trait, and plugging into it.” (supplychainstation.com)

This means that without the consent of collaboration, fueled by the acknowledgement of mutual gain, there is no supplier-enabled innovation. Without trust and a common vision, SEI is practically useless. This could certainly be a large reason as to why the value of SEI hasn’t yet been exploited to it’s full potential.

Let me explain more thoroughly.

I Scream, You Scream, We all scream for IP!!

One of the most damning hindrances to successfully conducting SEI is the debate around IP during the stages of innovation.

Once collaboration turns to innovation there is a certain grey area of ownership that buyers and suppliers alike typically become wary about. In an article by SEI Center, Procurement Leaders center for the topic, it is stated that definitions of IP in stages of innovation can help avoid the pitfalls of procurement/supplier disagreements.

“In order for both parties to be able to start collaborating, it’s important to put on record what each party is bringing to the situation. Existing capabilities, knowledge, technology and so on should be classified as background IP and remain the ownership of each organization. Anything which is created during the collaboration is then classified as foreground IP, and will be the new invention, product, service, whatever, being developed.” (sei.center)

Communication and trust is crucial in creating a fruitful gain for both parties, in regards to ownership of intellectual property. Sharing IP could lead to some of the common pitfalls involved in SEI, such as copyright infringement and so forth.

How do we make SEI work?

We will come back to this topic in a few weeks, and delve into how systematically practiced SRM can help manage, and aid, the journey towards SEI in a supply chain. Before innovating within a buyer-supplier relationship, one must know the in’s and out’s of their supplier’s existence. This is best done through compliance in the form of assessments, third party data, and supplier comparison.

Until next week.

This publication is brought to you by author Sam Jenks, but also on part by Kodiak Rating — A Supplier Relationship Management SaaS functioning out of Stockholm, Sweden. Kodiak Community intends to challenge traditional business practices with innovative thinking and creation.