A framework for supplier innovation: Implementing structures in purchasing for detecting and applying supplier innovation capabilities

The purpose of the paper is to explore structural necessities and further define framework elements in purchasing to detect capabilities and innovation potential on the suppliers’ side. Consistent identification of external innovation capabilities – from an economical and technical point of view – should be assured to fulfil heterogeneous demands for valuable processing in a more selective and innovative manner. The selected applied research method first comprises a literature review, a data analysis for segmenting strategic fit suppliers based on the company’s source of supply data and a distinctive qualitative case research with focus group interviews. Identified aspects in literature served as comparing data with recorded statements from the interviews. While the management of innovation processes is strongly dependent on how network partners cooperate, there has been limited research done particularly on companies’ purchasing level. In this case, the strategic focus in purchasing is of major importance. There, a distinction between product and process innovation allows a responsive environment to capture inventive ideas and developments. Furthermore, the main identified characteristics of innovative suppliers in this applied case are (i) social and strategic competence, (ii) network capability, (iii) availability of resources, (iv) the capability for gathering and transferring knowledge and (v) high communication skills, willingness and an open corporate culture. Derived results suggest that the revealed internal framework elements can support the recognition of decisive innovation indicators. These prerequisites are of high importance to detect supplier innovation, drive innovative purchasing management and support innovative thinking in interdisciplinary and inter-operational innovation teams.