Swiss pharmaceutical giant Roche has long taken Supplier-Enabled Innovation (SEI) seriously. Having established Supplier Relationship Centres in 2012, the company went onto create what it calls its Innovation Centres of Excellence (ICE) in 2015. (Managed by procurement, one might add.)
These centres represent a formal, structured and tangible attempt to encourage collaborative working between Roche and its suppliers (as well as internal stakeholders), and they are measured on the volume of new innovation business cases launched.
The investment by Roche procurement is by no means insignificant.
The centres have dedicated staff (known as Value Creation Agents) from both Roche and its partners and working environments that foster creativity and collaboration; including the use of various technologies and psychology tools such as emotional room and lighting configurations to optimise the innovation process. (Blue for creativity; red for challenging; green for planning; and neutral lighting for the evaluation of ideas, in case you’re wondering.)
The iterative process above was actually used by Walt Disney to turn his creative fantasies into reality by adopting three vital personas during the ideation and development phase – the dreamer, the realist and the critic. In Roche’s case, it uses the Disney method to develop potential solutions to the identified business needs of both itself and its innovation partners, and to then rigorously challenge and probe any potential risks and weaknesses of those ideas. All within a controlled and focused environment.
If this all comes across like a beanbag-infested, Silicon-Valley start-up cliché one need only look at the results being achieved by Roche and its centres – results which are now being reported on the company’s public website.
Since its launch, there have been 45 supplier-related business cases approved, 38 of which have been launched. Of these, 25 are considered core initiatives (continuous improvement), 10 are considered adjacent initiatives (new to Roche) and 10 are seen as disruptive (new to the world). In terms of the number of partners involved in the centres, seven have been completed, two are in progress and another five are in discussion phase.
But Clive Heal, who leads the innovation centres on behalf of Roche, still isn’t satisfied. He’s increasingly looking at applying the methodology to internal innovation development, working with different stakeholders across the business to pinpoint business need and work collaboratively on potential solutions.
And, I believe, he shares the vision from an earlier post that procurement is in the midst of fundamental change. Those CPOs who recognise this and drive their functions to become facilitators of collaboration and enablers of innovation will prosper. Those who don’t, won’t. Sounds simple really.
The work Procurement Leaders is doing on SEI will provide the insight and knowledge required to help justify investment in this area. We continue to find examples of procurement driving innovation from the supply base, and we are recognising trends and best practice that, if followed, promise to bring results.
Not every organisation will launch procurement-led innovation centres, but every CPO should be thinking about what the next five years holds for their function. And SEI should form the core of that thinking.
Find more blogs on Supplier-Enabled Innovation (SEI) at our Ovation site. To register your interest or to find out more about our Supplier-Enabled Innovation Compass, contact us here.