Integrated supply - bye products, hello solutions

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unlocking value.pngSuppliers in the coming decade will continue to take on bigger pieces of things they already do for customers. Think of it as ‘integrated supply on steriods’ where suppliers step out of their comfort zones to drive customer performance.

"I expect to see a lot more total solution-type relationships with suppliers, whether it’s an OEM, a third-party distribution partner, or a marketing partner,” says Larry Welch, formerly of Hewlett-Packard.

So, for example, a supplier of printing hardware for the office will either morph into — or be replaced by — a supplier of total print management solutions. The solution provider will take on the responsibility for things like:

• Optimising office productivity in the placement and quantity of printers.
• Reducing total printing costs from a 360-degree perspective, covering costs and total consumption of printing supplies, costs associated with service, support, equipment upgrade and replacement, and so forth.
• Developing and implementing printing best practices within the customer’s organization, for example, two-sided printing, black and white versus colour printing, copy-center versus individual printing, and so forth.

Where end-to-end supplier solutions do not already exist, suppliers are expected to develop them. And where the solutions already exist, project participants expect customer enterprises to become much more receptive to sourcing them in the coming decade. “There is a need to find creative solutions in just about any of the work that we do,” observes former GM Executive Director, Global Purchasing Barbara Whittaker. “Take an example like call centers, which so many companies use. Finding the right creative solution around call centers is something that can bring tremendous value to our end customers.”

However, finding those creative solutions relies on developing new models for buyer-seller relationships and for creating direct connections between solution providers and internal stakehoders. “When we allow the people bringing solutions to talk directly to our internal stakeholders — to sell the benefits of their solutions directly — you see internal resistance breaking down,” concludes Whittaker.

The information in this article was re-printed from the report ‘VISION 2020 Ideas for Procurement in 2020 by Industry-Leading Procurement Executives’.

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