VOL. 129 | NO. 233 | Monday, December 1, 2014
Even Procurement is Innovating
By Michael Graber
Derick Kurdy from J&J and Neel Tilak from Janssen discuss the potency of an innovation culture in the procurement department and how it works with key suppliers.
They began with a story about the Band-Aid, about how the inventor made it as an act of love for his wife. The moral of the story; innovations start with a need that is cared for and executed for a real problem.
Robert Wood Johnson built innovation into the credo and culture of Johnson & Johnson.
It's most recent manifestation is called supplier-enabled innovation.
Here's how it works:
- Seek innovations wherever they may be.
- Suppliers empower innovation beyond one company's existing ability.
- A culture of innovation needs to be present to accept ideas.
- Investing in suppliers with business insights grows the overall innovation capacity.
In 2007, pharma pipeline was drying up. J&J sought new product identification and development. In 2010 the program was named SEI (supplier-enabled innovation), claiming "together, we are more." They began telling the multifaceted story of innovation at J&J internally to build the culture.
Boldly, they asked themselves, "What can we do across procurement to drive innovation across the enterprise?"
The team split innovations into three value-generating categories: product, business model and process. Suppliers helped in all three areas. J&J shares the need and suppliers craft solutions. It has reached such popularity that there are now coveted annual supplier awards.
In 2012, the SEI team began to socialize their ethos to their 1000-plus procurement professionals across the globe. As well, they invited fitting suppliers into the process of asset pipeline to ensure new technologies would be available once a product scales. They named it Advanced Sourcing & Innovation.
Now, in 2014, tethering the market growth drivers and corporate strategy with procurement capabilities and innovation is key to create value, lead with a purposeful pipeline, scale the globe and execute as quickly as possible.
Michael Graber is managing partner of the Southern Growth Studio, an innovation and strategic growth firm based in Memphis. Visit southerngrowthstudio.com to learn more.