Friday, June 24, 2005

Linking Supplier Diversity to Innovation

Don't just take my word for it, Frans Johansson wrote an entire book on the subject called "The Medici Effect", which looks at traditional thoughts and processes and sheds new perspectives on how to look at them. For example, many procurement organizations look for ways to squeeze costs from suppliers, instead of looking to them for innovative ideas. It may sound simple enough, but not many organizations are doing it. At IBM, one Native American supplier built a website to help its clients order, replace and recycle shipping pallets, instead of using the phone. Clients such as IBM now have access to real-time inventory and at the click of the button can have the supplier pick up broken pallets and have the recycled. This eliminates the expense of IBM discarding them and it frees up space on the plant floor. That's supplier innovation!

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