Latest / The Buyer's Side with Fexingo: Procurement, Sourcing, and B2B Purchasing Decisions / How One Buyer Used Supplier Innovation Days to Find Breakthrough Ideas
Transcript
- Lucas: Let's talk about a procurement tool that doesn't get nearly enough attention — the Supplier Innovation Day. Not a trade show, not a webinar, not a request for proposal. A structured, in-person event where you bring in your key suppliers and ask them to solve problems you haven't even defined yet. Luna: Wait — ask them to solve problems you haven't defined? That sounds like handing them the keys to the castle. Lucas: It can feel that way, and that's exactly why most buyers never try it. But a procurement director at a mid-size automotive parts supplier — let's call the company Pinnacle Components — ran one last year. Fifteen suppliers, one day, and the outcome was three patentable ideas and a twelve percent reduction in scrap waste within six months. Luna: Three patentable ideas from a single day. That's a better innovation funnel than most R&D departments I've seen. Lucas: Right. And the key was how they structured the day. It wasn't a free-for-all. The buyer set three ground rules upfront. First, each supplier had to present a problem they believed Pinnacle was facing — not a solution they wanted to sell. Second, any intellectual property generated during the session would be jointly owned, with a pre-agreed licensing framework. Third, no pricing discussions allowed. The whole day was off-limits to commercial negotiation. Luna: That IP piece is huge. A lot of buyers worry that if they share too much, a supplier will take the idea to a competitor. Lucas: Exactly. So Pinnacle had their legal team draft a simple one-page IP agreement before the event. Each supplier signed it as a condition of participation. It basically said: if we develop something together during the innovation day, we both own it, and we'll negotiate a fair royalty if it gets commercialised. That removed the fear on both sides. Luna: So what did the day actually look like? Was it a bunch of presentations or something more interactive? Lucas: More interactive. The morning was structured as a series of problem-framing workshops. Pinnacle's procurement team, along with a few engineers and plant managers, presented three broad challenge areas: reducing material waste on the stamping line, improving the durability of a particular fastener, and finding a cheaper alternative to a specialty coating. But they deliberately didn't propose solutions. Luna: So they said 'here's a problem we're having' and then let the suppliers ask questions. Lucas: Yes. And the suppliers were told: don't pitch your product. Instead, ask clarifying questions. What's the current scrap rate? What's the root cause? Have you tried X? That forced the suppliers to think like partners, not vendors. After lunch, each supplier was given a whiteboard and an hour to sketch out a proposed approach. Then they presented to a panel of Pinnacle's engineers and procurement leaders. Luna: And the panel picked three ideas that were patentable? Lucas: They identified three that had clear novelty and commercial potential. One was a new alloy composition for that fastener that extended its life by four hundred percent. Another was a closed-loop coolant system that reduced waste by nearly a third. The third was a coating process that eliminated a toxic chemical from the supply chain entirely. All three came from suppliers that Pinnacle had worked with for years but never asked to innovate. Luna: That's impressive, but it also sounds expensive. How much did the day cost? Lucas: Pinnacle spent about thirty thousand dollars — including travel, catering, the venue, and a small honorarium for each supplier to cover their time. But the scrap reduction alone saved them over two hundred thousand dollars in the first year. So the return on investment was immediate and measurable. Luna: Okay, but I'm thinking of a buyer at a smaller company — say fifty million in revenue. They can't afford thirty grand for an event like that. Can they still do something similar? Lucas: Absolutely. And this is where the model scales down really well. Instead of a full day, you can do a half-day virtual session with your top five suppliers. Use a shared digital whiteboard. Ask each supplier to pre-submit a one-page problem hypothesis. Then spend three hours on a video call workshopping two or three of them. The IP agreement can be electronic. Total cost: maybe a few thousand dollars for facilitation and a small gift card for participants. Luna: And you still get the same dynamic — suppliers thinking about your problems instead of just their products? Lucas: Exactly. The format forces a different kind of conversation. You're not saying 'sell me something cheaper.' You're saying 'help me figure out what's possible.' And that shifts the relationship from transactional to collaborative. One procurement manager I talked to said that after a virtual innovation day, one of her suppliers redesigned a component without being asked, just because they saw an opportunity during the session. Luna: That's the kind of story that makes procurement exciting, honestly. It's not just about cutting costs. Lucas: No, and I think that's the real takeaway. Procurement has a stereotype — it's the department that squeezes margins. But tools like Supplier Innovation Days show that buyers can be a source of growth. They can unlock value that the supplier didn't even know they had. Luna: And it builds trust. If a supplier sees that you're willing to invest time and share IP, they're more likely to give you their best ideas first, rather than saving them for a bigger customer. Lucas: That's exactly what happened with Pinnacle. The supplier that came up with the alloy composition later told them: 'We've had that idea on the shelf for two years, but we never pitched it because we assumed you'd just ask for a price cut.' The innovation day gave them permission to bring it forward. Luna: So the buyer has to create the space. That's the active part of the job. Lucas: It is. And it takes some courage, because you're ceding control. You're saying 'I don't have the answer, but I trust you to help find it.' That's not the traditional buyer posture. But the results speak for themselves. Luna: I wonder how many buyers are doing this now. It feels like something that should be more common. Lucas: It's still rare, but it's growing. A survey from the Institute for Supply Management last year found that only about twelve percent of companies had hosted a formal supplier innovation event. But of those, over eighty percent reported at least one commercially viable idea coming out of it. The barrier isn't cost — it's mindset. Luna: And maybe a little bit of fear about losing control of the relationship. Lucas: Sure. But if you set the rules upfront — IP sharing, no pricing, collaborative problem-framing — you actually gain control, because you're steering the conversation toward your priorities. You're not just reacting to supplier pitches. Luna: I want to go back to something you said earlier — the idea that suppliers might have ideas they've been sitting on. That's such a powerful insight. How do you surface that without a formal event? Lucas: You can start small. In your next quarterly business review with a key supplier, add a ten-minute agenda item: 'What's one thing you think we're missing?' Don't ask for a proposal. Just ask for an observation. You might be surprised what comes up. Luna: That's a low-risk way to test the waters. And if you get a good idea, you can build toward a bigger event. Lucas: Exactly. And if you build a track record of acting on supplier ideas, the word spreads. Suppliers start to see you as a buyer who's worth bringing their best thinking to. That's a competitive advantage that no RFP process can replicate. Luna: You know, this kind of conversation is exactly why I love working on this show. We get to dig into real strategies that actually change how people work. Lucas: Same here. And I think that's also why we keep the show ad-free. We don't want to interrupt this kind of discussion with a commercial break. If you find value in what we're doing, the best way to support it is a small contribution at buy me a coffee dot com slash fexingo. That's what keeps the lights on and lets us keep drilling into these stories. Luna: It really does make a difference. Even a few dollars helps us maintain the independence to cover topics like this without any outside influence. Lucas: Okay, back to the innovation day. One more thing I want to highlight — the importance of follow-through. Pinnacle didn't just collect ideas and then go back to business as usual. They formed a joint task force with each of the three suppliers whose ideas were selected. They set milestones, shared resources, and reported progress at every quarterly review. Luna: So the innovation day was really just the starting gun. Lucas: Exactly. The real work happened in the months after. And because they had the IP agreement in place, both sides felt secure investing time and money. One of the ideas is now in production and generating revenue for both companies. Luna: That's the ultimate proof point. When a supplier innovation leads to actual revenue, not just cost savings, the conversation with the CFO changes completely. Lucas: It does. Suddenly procurement is not a cost center — it's a profit center. And that's a story every buyer should have in their back pocket. Luna: Alright, I'm convinced. I think I'll try adding that ten-minute question to my next supplier review. Lucas: Do it. And let us know how it goes. We'd love to hear about the ideas that come out of it.