This is the successful exploitation of new ideas which further social, environmental and economic sustainability objectives. A number of innovative solutions in product design, production processes and supply chain management are being demanded to meet sustainability challenges, resources depletion, climate change, entrenched poverty & sustainability.
It is important to realize that innovation is design, procurement practices, does not necessarily involve brand new ideas. Innovation is about the development, integration, diffusion, adoption and commercialization of ideas. Many best procurement techniques are intended actively to stimulate innovation in the supply chain. These may include:
- Early Supplier Involvement (ESI) and partnering.
- Supplier development and best practice sharing.
- Innovation councils or cross functional innovation steering groups.
- Forward commitment planning (FCP)
FCP is a commitment to purchase at a point in future a product that does not yet exist commercially against a specification that current products don‘t meet at a sufficient scale to make it worthwhile for suppliers to invest in tooling up and manufacture. FCP evidences to the market that there is a need and demand for sustainable products and therefore allows the supply chain to design them to meet the FCP specification.
Sustainable procurement can therefore support sustainable innovation in the following ways:
1. Sourcing innovative products, services and processes as they become available and viable options.
2. Selecting, supporting and leveraging the capabilities of suppliers who are innovating or have the potential to innovate in pursuit of greater sustainability.
3. Supporting the buying organisation to own innovation capability by promoting sustainable options in design, specification and sourcing.