3rd UPDATE survey results on Managing Innovative Suppliers

Meanwhile 120 people completed the survey, which is good! TXS all! (But then I could need a few more survey respondents…). This post discusses some survey results in more detail. 

COMPANY PROFILES

The survey has focused on companies and professionals in the built environment here in New Zealand.

SIZE DOES MATTER

Approximately 50% of surveyed companies have less than 100 employees; and 30% have more than 250 employees. Debating when a company should be considered small or large is quite a different story, which I will not discuss now. I do not follow a EU (< 250 staff) definition nor an NZ (< 20 staff) definition, but something in between. 

Based on literature I assume companies with less than 100 staff (65 respondents) will behave differently from companies with more than 250 staff (35 respondents), with in-between companies showing a sort of mixed behaviour. But then size does not explain everything and other variables will have an impact on the firm's behaviour. Anyway, for contrasting large and small firm procurement behaviour in this post, I skipped the middle segment (10 respondents). Later-on I will use more advanced statistics for analysing the effects of multiple variables.

DIFFERENT FROM OTHER NZ FIRMS. 

Most surveyed small-companies seem service-oriented, have an entrepreneurial approach and focus on excellent products. 

The surveyed small-companies claim that supplier interaction helps them in realizing successful green innovations and in achieving better company results. The intensity of such interactions with suppliers seem to vary, but small-companies seem to indicate more often that they have medium or high intense relations than large companies.

At the same time, small-company respondents indicated that their general management and strategy experience is markedly higher than their innovation or procurement experience. In general large company respondents suggest they have higher experience levels. 

Please note that we purposely (also) selected survey respondents from small entrepreneurial and ‘green’ companies. Hence our survey outcomes may differ from the wider building environment in New Zealand and at the same time could give some learning to other companies.  

SOME MORE SURVEY FINDINGS

Briefly some findings as they seem to appear.

When it comes to defining what specifications companies need from innovative suppliers (1st picture), both small and large companies seem to have fairly similar requirements. They both focus either on the technology or on the economic value, and want innovative suppliers to contribute to the specifications (light blue arrows). They did not consider that they had to manage adversial relationships (dark blue arrows).  

Both the survey and the roundtable discussion showed that managing relationship (2nd picture) with innovative suppliers is very important with small companies. These relations also seem more focused on mutual goals and learning for future opportunities. Although some recent procurement research (Wynstra, 2016?) could suggest that early supplier involvement is not always beneficial, this is still seen as fairly important with both small and large companies.

In case of  finding or selecting (3rd picture) innovative suppliers, small companies seem to appreciate flexible and cooperative suppliers, whereas large companies appreciate that their suppliers know the profiles and demands of end customers.  Large companies seem to use a wider set of selection criteria than small companies. Scanning overseas supplier markets is not high on the priority list of both types of companies. 

Overall, negotiating and contracting (picture to the right) was seen as a low-priority activity within small companies. This could partly be explained by their low negoiation power.

Moreover, negotiations of small companies seem to focus more on opportunities. Larger companies seem to focus more on total costs or managing risks. In line with that, they also seem to focus more on formal contracts than small-companies do.

ROUND-TABLE DISCUSSIONS

Last Friday (24 June) 15 professionals from the built environment discussed first survey results at AUT City Campus. They had lively and industry relevant discussions and appreciated the interaction. “Must do this more often”. “Thanks for these insights, it was most informative”. We will have a second discussion round at NZGBC on the 7^th of July.

Please complete the survey & contact me if you want to participate. We've already confirmations from several people. The discussion again promises to be a good learning moment for all of us.

Enjoy the week - stay tuned for more research. Best regards, Anne