What is the role of Purchasing in the success of Innovation?

1. Innovation Driven Procurement (IDP) November 2008

4. The Innovation Driven Procurement (IDP) Strategy based on the Corporate and Procurement Strategy will transform procurement into a true business partner It is essential to align the Procurement Strategy with the overall Corporate Strategy to ensure Procurement’s efforts are focused appropriately and are consistent with the fundamental direction of the business. This is what makes Procurement a service provider for the business. Whereas innovation is often stressed in Corporate Strategy and open innovation is embraced by many successful companies, many struggle to translate this into the Procurement Strategy. Let alone providing procurement services satisfying the business’ innovation needs. The translation of the Corporate Innovation Strategy into a Innovation Driven Procurement (IDP) Strategy provides focus for procurement. Mechanisms such as those shown in the P&G case need to be formalised and embedded in the organization. IDP will transform Procurement from a service provider into a business partner. Depending on the IDP strategy, new roles and services will be provided by procurement. This can have an effect on the entire procurement function, mainly impacting tactical procurement operations such as sourcing, demand management and supplier relationship management. From Strategy to IDP Support services Procurement Strategy Corporate Strategy Innovation initiatives Corporate Procurement Strategy Innovation IDP

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