Why Early Supplier Involvement (ESI) for innovation is so difficult when it comes
to execution is hard to understand. Here are some reasons why this might be
happening in your organization:
[ Note: This post (originally published on October 10, 2012 was updated with minor formatting changes on February 6, 2021]
- Lack of top leadership engagement at the idea/concept stage:
As explained in an earlier post, the biggest challenge for New Product or
Innovation managers is to get the top leadership team to really focus at the early stages of deciding what. concept to pursue. The CEO and CMO (Chief Marketing Officer) might be sold a particular idea but the CFO might be too busy with the new
ERP system being installed. It might also happen that the head of the
Supply/Procurement function reports to the CFO. You can imagine the how effective the CFO might be in such a situation about updating the Head of Supply Management regarding why the concept that was decided.
- Supply Chain involved very late: The people who will deliver i.e. suppliers through the supply chain folks and even internal manufacturing folks are
frequently not involved in the innovation team at the early stages. One
reason is that marketing wants to figure out what might work in the market
with customers. And involving the typical manufacturing/supply chain folks
can mean some serious “can’t be done’s.” Not that these folks
are naysayers but they know that inability to deliver could become a big
problem as market launch draws near.
- Late involvement doesn’t help: Involving people who’ll deliver later in the
innovation process hobbles the innovation game. Because working on the
CEO’s mandate people just seem to trudge along without the passion to
create something that is better than the concept that market research
revealed. What results is a sub-optimal product that does not entirely
capture the essence of the concept that the top leadership had approved.
Market success and sales are lukewarm at best.
So what is the solution to this ESI problem? Probably a first step is buy in and
commitment from top leadership, at the early stages when alternative concepts
are being evaluated. If top leadership is engaged at the early stages the
C-Suite discussion will bring up execution issues and people that can make
things happen will be tapped and suppliers who can deliver will find themselves
being invited to the innovation team meetings. For even the greatest idea is
lost without great execution that Early Supplier Involvement (ESI) can bring.