Supply Chain

3M Report Reveals Better Supplier Engagement Could Help Drive Innovation

Supplier collaboration and sustainability can drive innovation and growth in top supply chains, but only 43 percent of suppliers feel fully empowered to collaborate with their partners, says new research from 3M. Surveying 237 suppliers across the U.S., the report uncovers insight on the most urgent trends, opportunities and challenges facing suppliers today.

By Sustainable Brands | Published 7 years ago | About a 3 minute read

Across the board, suppliers indicated that running a sustainable operation results in positive business outcomes. Additionally, creating a more socially responsible supply chain, compliance and brand reputation were also identified as top priorities.

Yet despite supplier buy-in of sustainability, half of all suppliers surveyed admitted having held back from making strategic recommendations due to lack of incentive or customer openness. Considering that 57 percent of suppliers don’t feel encouraged or empowered to innovate and make suggestions for improvement for the customers they supply, this is not surprising.

Whether it’s a more affordable way to package goods, or a new product innovation, organizations that fail to engage with suppliers risk leaving major value, cost savings and expertise on the table.

Adding to the disconnect is the fact that 70 percent of suppliers said at least half of the customers they supply do not have a strong system and process in place for buyer and supplier collaboration. This coordination gap is potentially costing customers millions in efficiency and development opportunities.

But it’s not all bad news. According to the report, sixty percent of organizations are in the process of making major changes and upgrades to their systems and technology to become more connected to customers. Major technology upgrades — which allow suppliers and their customers to communicate via a cloud system, among other benefits — are helping suppliers efficiently serve their partners. Fifty-eight percent of organizations already have fully modern systems in place to achieve this.

However, only 29 percent of organizations currently have a strong system in place for two-way demand planning. While most suppliers agree the newly digitized system is beneficial to their partner relationships, one-fourth of respondents said organizations they supply make them use technology or systems that negatively impact productivity and collaboration.

3M’s research also uncovered data pertaining to current risks throughout the supply chain. Research indicated that sixty-one percent of respondents identified volatile commodity and supply prices as their primary concern. Other top risks included:

Uncertain policies of new US administration
Regulatory compliance
The performance of tier two and tier three suppliers
Natural disasters and supply disruptions
Cybersecurity

Organizations that collaborate with their suppliers can expect to reap the benefits of a successful partnership, in which suppliers are more open to sharing ideas and fostering a relationship, whereas non-collaborators are leaving immense value on the table. As companies continue to zero in on supply chains in an effort to drive sustainability efforts, supplier relationships will increasingly improve.