05: Managing Supplier Innovations

A global food and beverage organization wanted a more systematic method for finding and evaluating innovations in its supply chain. Specifically, the company wanted to identify new and hopefully useful plant-based ingredients. While the possibility of finding materials leading to new products would be welcome, the real objective was to identify potential substitutes for materials in existing products. The benefits of a successful discovery included the opportunity to lower unit costs, mitigate risks associated with raw material volatility (e.g., negative crop forecasts), and even to improve product nutrition profiles.

The first phase of this project intended to increase the understanding of ingredient information and ideas available from suppliers. Also, it was important to identify the various internal roles needed to participate in the evaluation of such information. A type of expo or conference was planned to accomplish this. Over the course of several days, a number of facilitated vendor presentations were provided to a global audience of food scientists, corporate attorneys (labeling expertise), procurement specialists, product managers, and manufacturing process engineers. Assessments conducted by the participants helped identify more than a dozen materials exceeding the minimum threshold for possible adoption. The success of this exercise garnered sufficient executive support to implement the second phase of the project. This consisted of a new front-end process specifically designed to enable suppliers to more easily submit innovative ideas to the organization. The back-end of the process enabled the management of various cross-departmental evaluations needed to support product decisions.

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