Because of the widespread inventory glut, many firms are drowning in obsolete items. According to McKinsey, new product launches generate more than 25% of sales and profits across sectors. Innovation is a collaborative effort that demands the collaboration of your whole supply chain. Here are four reasons why you should collaborate on innovation with your suppliers.
- Suppliers may speed up research activities, which can help bring new and innovative goods to market more quickly. In 2021, IBM announced a collaboration with the German chemical company Evonik to leverage the tech giant’s AI algorithms to develop novel materials for goods. External supplier innovation also assists businesses in better managing time and resources.
- Material costs have soared in recent years due to increased demand and constrained supply. To save money, include suppliers in your plans as early as possible. To help keep costs down, suggest new materials or designs. The money saved might be reinvested in the overall growth of the firm.
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- Strong supplier connections aid in brand growth and the acquisition of new consumers. More significantly, you obtain a dependable partner who may prioritise your orders or give you other advantages during times of interruption. Businesses may be afraid to collaborate with their suppliers, but taking the risk can result in a long-term partnership.
- Many major firms are failing to satisfy lofty sustainability goals. Collaboration with suppliers may assist businesses in unlocking innovative solutions that achieve sustainability goals. Unilever, for example, collaborated with carbon recycling firm LanzaTech and manufacturer India Glycols to develop a laundry capsule made from recovered emissions.
