The Purchasing Function: «In an uncertain context, diversification is key!»
Publié le September 30, 2013, Mis à jour le June 17, 2014
What is the common point between a Danone yoghurt cup, the product offer of communication company 3ma, Calrsberg, or Cryostar, a company with expertise in energy-related high technology? All such companies have successfully pondered how innovation can be brought about through the purchasing function. This theme was closely investigated in two conferences organised by EM Strasbourg Business School in Paris and Mulhouse before summer 2013. The two events were moderated by Associate Professor Laurence Viale, head of the Masters degree course in Business Administration Executive Track. In this interview, Laurence Viale highlights some challenges faced by companies as well as the importance of an alternative approach to the purchasing function.
What does innovation entail in terms of purchasing? Laurence Viale : « Innovating involves making a winning bet on launching something new on the market, whether it be a product or service, an organisational system or a process », according to a definition from the Cité des Sciences et de lindustrie. When referring to innovation through purchasing, one means resorting to resources that are not available through suppliers. Such resources may be material ones (products, raw materials, etc.) or immaterial ones (knowledge, unique competences, know-how, techniques, etc.).
Is innovation really important in crisis times, when companies are primarily concerned with their own survival? Laurence Viale: In an uncertain context and in an ultra-saturated market, differentiation is paramount. Committing to building competitive advantages and creating sustainable values is critical. Thus companies place innovation at the heart of their strategies so as to maintain such an advantage and enjoy robust growth.
Purchasers attend to those priorities by making innovation through suppliers one of the main avenues for the development of their profession, according to some prospective studies that have been published in academic journals and recently corroborated by numerous consultancies such as Bearing Point.
Can you quote an example of a successful innovation initiative? Laurence Viale: In one of our conferences on this topic, Vincent Ferry, who is Packaging Development Manager with Danone, presented to us his latest innovation with the new Danone cup. His project started from the observation that At Danone, there were too many cups for a given brand, which blurred the message conveyed to consumers. Not only is the new yoghurt cup different from a technical standpoint (it features a rounded bottom) but it has also enabled Danone to create global synergies, to develop international branding strategies and to further lighten the weight of packaging. In the industrial sector, Cryostar has placed innovation at the core of its DNA for forty years. Its latest innovation, a high-pressure pump, which was jointly developed with a supplier, allowed the supplier company to enhance its output capacity while speeding up the lead-time for the project launch.
Are there any recipes for successful innovation through the purchasing function? Laurence Viale: Without meaning to be exhaustive, I would rather point to some good practices that seem to have created a broad consensus: - ensuring the upstream integration of purchases (and, by extension, suppliers) in all innovation projects; - putting in place agile organisations and then aligning internal departments and external organisations with a view to creating a network around an innovative project; - providing purchasers with enough leeway and trial and error opportunities so that they can hone their intrapreneurial competences; - giving priority to collaboration on win-win co-creation projects both internally (between different departments) and externally (with suppliers).