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Innovations in Strategic Sourcing
Praveen Gupta
Director, Corporate Quality
Author, Global Innovation Science Handbook
July 17, 2017
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7/22/2014 © Prysm, Inc. 2
Enable rich
collaboration,
visualization, and
communication
Streamline and
enhance work flow
Deliver greater team
productivity
Speed decision
making
Innovative Cascade Collaboration Solutions
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Select Customers
• For comparisons
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© Prysm, Inc. 4
Value
(ROI)
Partnership
Operations Collaboration Design,
Services
Business
Systems
Partners &
Suppliers
Extent of
Control
Teamwork Functions
(IT, MFG)
Few
Suppliers
Process
Control
Supplier
Management
DFM
Just In time
Hundreds
of
Suppliers
Product
Control
SPC, TQM,
Improvement
1000s of
Suppliers
Multiple
Suppliers
Risk
Reduction
Cost
Reduction
Supplier
Reduction
Early Supplier
Involvement
Outsourcing
Business
Processes
Sourcing
Systems
Co-Sourcing
(Shelter)
1970s 1970s Early 1980s Late 1980s 1990s 2000s 2010s
Historical Innovations in Sourcing
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ROI Using Conventional Methods of Innovation is Low
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BW Top Ten ROI ($) $ / year
Apple 2.85 .71
Google 2.83 .71
Toyota 2.04 .51
GE 1.74 .44
Microsoft .83 .21
PnG .60 .15
3m .52 .13
Walt Disney .51 .13
IBM .41 .10
Sony .36 .09
Conventional methods of
innovation yield slower return
on innovation, and take 5 – 7 years
for recovering investment.
Data: 2003 - 2006
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Building Block of Innovation: Individuals can think BIG!
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Innovation
Idea
Intelligence
Creativity
Invention
Internet Customers
Suppliers Rest of the world
Free Lancers
Universities
Labs
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Innovative Thinking: Fun can lead to innovation.
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Th
ink
ing
Tim
e (
min
)
Pe
r Id
ea
Extent of Innovativeness
Good Crazy Stupid Funny
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Routine Innovations Needs its Own Space
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General
Manager
Production
Manager
Cafeteria Restrooms
Purchasing
Manager
Performance
Manager
Human Capital
Manager Engineering
Innovation
Officer
Innovation
Room
(K,P,I)
Production Space
Assembly
Test
Pack/Ship
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TEDOC Methodology for Profitable Innovations
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Target (T) Opportunity
Develop (D) Alternatives
Explore (E) ideas
Optimize (O) Solution
Commercialize (C) Innovation
• Listen to
customer for
specific needs
• Making
customer’s life
easier, better,
and richer
• Explore ‘what if’
scenarios
• Research
customer’s
customers for
their value
proposition
• Create
innovative
options for the
customer, and
customers’
customers
• Optimize the
solution for
the
customer
giving the
best value
• Close the
deal
– What
– When
– Value
– Fun
Make innovations affordable and profitable!
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Types of Innovations - All Innovations are Not Equal.
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Fundamental Platform Derivatives Variations
K,P
,I
Ein
ste
in
Ne
wto
n
Edison
Knowledge (K) Play (P) Imagination (I)
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© Prysm, Inc. 11
Idea 1 Social
Innovations
Legal Innovations
Idea 2 IT Innovations Idea
Innovations
Product Dev.
Innovations
Idea 3 Idea
Innovations
Techno
Innovations
Business Model
Innovation
Idea n Relationship
Innovations
Innovations in
Teamwork
Process
Innovations
Operations
Innovations
Create use of human
resources
Product
Control
Process
Control
Extent of
Control
Teamwork Collaboration Value
(ROI)
Partnership
(Shelter)
Multiple
Suppliers
SPC, TQM,
Improvement
Supplier
Management
DFM
Just In time
Functions
(IT, MFG)
Design,
Services
Business Systems
Risk
Reduction
Cost
Reduction
Supplier
Reduction
Early
Supplier
Involvement
Outsourcing
Business
Processes
Sourcing
Systems
Co-Sourcing
Innovation Opportunities in Sourcing
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Additional Innovation Opportunities in Sourcing
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1. Reverse logistics
2. Delivery models
3. Co-creations
4. Sourced shared services
5. Shared manufacturing
6. Shared deliveries
Any additional ideas for innovation in Sourcing?
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Thank you!!!
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Contact Info:
Praveen Gupta
Tel: (408) 429-9782 (cell)