Looking to suppliers for innovation

When business is booming, procurement can largely just get on with it. Barring serious supply shortages that can send input costs soaring, in boom times purchasing generally escapes the corporate limelight while executive attention is focused on producing the goods and getting them out into a thriving market.

But a downturn is a different story. As buyers know, at times like these the managerial spotlight turns on procurement to find the margin-driving cost cuts that just might save the organisation's bacon.

If it were simply a matter of hitting suppliers with price reductions and longer payment terms, that would be no problem. But in a recession as severe as this, taking it out on suppliers could drive them over the edge, turning a cost-cutting exercise into an expensive scramble for replacement supplies and making you few friends.

That's one reason the perennial topic of innovation is more important now than ever. So how do you get hold of the fresh ideas that will help you through tough times? Having already shaken up their own brains and teams for ideas, many procurement professionals are looking in both directions along the supply chain - seeking new ideas from suppliers and internal customers.

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