Supplier innovation management

Today, innovation collaboration with existing suppliers, as well with new interfaces with external resources, has become an essential element for company success. One consequence of this development is that firms are more dependent on various types of suppliers, contractors and partners. Increasingly, the most qualified centers of excellence in the relevant know-how are located outside the boundaries of a company, and that competitive advantage can increasingly be gained rather with the relationships and linkages a firm can forge with external organizations. This means that the actual configuration of the interface between a buyer and a seller (or service provider) determines to a large extent what buyer is able to capture from a supplier in addition to the actual product or service. This report presents the main results of SIM project (Supplier Innovation Management). The project was conducted in collaboration with VTT and Aalto University, and was part of Tekes' 'Smart Procurement Program'. The project results offer the Finnish companies and public organizations systematic and purposeful means to stimulate and fasten supplier innovations, and ways to integrate supplier innovation activities to the company's business. The project emphasizes how supplier innovations can be connected to the company's processes, to different product development phases, capabilities and knowledge. The project increases the capabilities to manage strategic purchases and supplier innovation. This capability enables companies to better manage their external resource base and develop supply market.