Philips Group Innovation – innovation made real in supplier relationships
Since its inception, Philips has the vision to improve people’s lives with meaningful innovation. And until today this is still the compass for the company. In other words: Innovation is in the DNA of the company. However, companies still heavily rely on internal capabilities at this moment and primarily innovate in secret, trying to create breakthrough technology, business models and products that outmaneuver the competition from the-inside-out.
At Philips, there is a strong and growing believe in two key success factors that will enable the company to grow fast, systematically and be successful:
- Strengthening the innovation capability, and;
- Improving the time-to-market, or speed
It is felt that focusing solely on internal resources limits the idea stream, limits speed, and therefore limits growth through innovation. Many of the answers for growth, development, speed and – of course – innovation, can come from the supplier community.
So … what to do? How to grow and develop the business in ever changing environments, changing customers’ needs and disruptive competition? Tapping into the innovative potential of the supply base (existing and new suppliers) will deliver significant opportunities. As they know you and the sector, benefits can be achieved on the shorter term. The more capable procurement is in facilitating exchanges and understanding the entire business ecosystem (incl. stakeholders, suppliers, consumers and third parties) the greater the results of Supplier Enabled Innovation. So Philips wants to do more than just wait for suppliers to offer cooperation!
Together with various cross-functional departments at Philips (eg. architects, designers, R&D, Procurement), a clear and concise Open Innovation Event is developed, intended to connect the dots between the supplier community and Philips’ R&D Department. Procurement led the way to establishing contact and connection. At the High Tech Campus in Eindhoven – the hub for open innovation and establishing new partnerships in the Benelux – we helped organize 14 roundtables sessions with 20 suppliers in one-day.
Robrecht Maes, Head of Procurement at Philips Group Innovation is truly satisfied with the results, without being unrealistic. He writes: “Although our experience, and experiment was extremely successful, we are not claiming that open innovation and thus building trustworthy relationships comes without complexities or that it is a ‘one size fits all’ strategy. But, I believe, the opportunity to leverage for us all, supplier and customer is far too big to ignore.”
More on this project? Go to and read Robrecht’s full story on this matter.