The 55th Siemens Annual Shareholders’ Meeting in February 2021 and the associated change of management mark the beginning of a new chapter – a new chapter set to focus on four strategic priorities: Customer Impact, Technology with Purpose, Empowered People and Growth Mindset. Technology with Purpose, which puts technologies center stage, is all about bringing innovations to market faster. Intended to create value and drive transformation processes, this focus places special emphasis on one particular objective: understanding what the customer needs and using that understanding to generate “Customer Impact”. But how does a company reach the point of properly understanding what its customers really need? The answer is that it must always stay one step ahead.
One step ahead with Supplier Innovation@Siemens
The innovation strategy practiced at Siemens takes in external sources of innovation as well as internal ones, which means that Siemens Supply Chain Management (SCM) have a role to play. Supplier innovation is all about working in partnership (for example with already existing or potential suppliers, Start-Ups, institutions or universities) to make systematic use of the innovative capabilities of them and breathing life into new ideas through dialog and discussion. Being able to identify innovative solutions and trends is vital for an organization aiming to be and remain a technology pacesetter.
Collaborating with external innovation partners in this way creates a win-win situation, with innovative performance boosted significantly on both sides. Supplier Innovation may sound very procurement-specific, but it has a very broad interpretation: A strong internal network within procurement is crucial for successful innovation. A close working relationship with units like Product Management that interact extensively with customers, determine Siemens’ future portfolio and describe the innovation required, is particularly important.
Example from operating business: Supplier Innovation@Smart Infrastructure (SI)
The successful integration of this innovation module into our development processes is a key issue for all Siemens businesses. Smart Infrastructure established a supplier innovation community at the beginning of the fiscal year with this in mind. The new community, which includes members from all SI purchasing functions and business areas, aims to build up supplier innovation until it becomes an integral part of development activities, shining a spotlight on the innovative capabilities of our suppliers. The diverse team structure facilitates a continuous dialog between the various business areas for effective sharing of experience, the joint generation of ideas and the exploitation of synergies in implementation.
The planned activities center on the organization of a two-way exchange between Siemens SCM and the business units, which is essential to unify the strategic perspective, with its focus on the development of the necessary methods and tools, and the operational implementation of innovations. (For more information please contact Michael Sonst).
How does Siemens capitalize on expertise from the supplier market?
Suppliers whose expertise is known can be contacted quickly for input or invited to a meeting. Innovation roadshows and innovation conferences provide a forum for sharing knowledge and discussing new ideas and solutions. But what happens in the search for a solution if the relevant contact person is not available on an ad hoc basis? How can the expertise of subcontractors or partners from outside the sector be accessed?
In addition to its established “technology and innovation management” and “university relations” activities, SCM relies on new, in some cases AI-based methods and tools, which, however, entail a very different approach depending on the respective “use case”. Open innovation provides a way to find creative potential solutions to technical problems – via open search portals in the case of new providers. SCM is also using new AI-based search instruments for digital scouting in the highly sensitive core area. More than 130 projects have been supported via such platforms over recent years, many of them leading to a successful outcome.
Another key module is the Siemens Supplier Innovation Platform, an online exhibition space exclusive to Siemens in which existing suppliers and potential new suppliers are able to present their ideas in selected areas and discuss them with experts. Organized as a virtual trade fair, the platform enables participants to discuss issues and share ideas all year round – even when physical travel is greatly restricted (Contact: Michael Klinger).
Strengths of the Siemens strategy
Siemens’ new chapter opens up fresh approaches and enables customer requirements to be ascertained with greater precision. Supplier innovations represent a huge, valuable additional resource and can go a long way to helping Siemens achieve its own objectives, so it makes sense for Siemens procurement to make them a priority. Mindful of the many very substantial benefits to be gained for all parties from open and very close collaboration with external innovation partners, Konrad Weichmann from SCM has the following message:
Come and speak to Siemens, share your ideas with us and let us jointly see how we can take your innovations forward.Konrad Weichmann, Director Supplier Innovation
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