gaynor whyles, jera consulting digital innovation for regional growth thessaloniki april 2014...
TRANSCRIPT
Gaynor Whyles, JERA Consulting
DIGITAL INNOVATION FOR REGIONAL GROWTH
Thessaloniki April 2014
Efficiency, quality & sustainability through PPI
What do we mean by innovation?
Innovation is often confused with research They are in fact very different processes
Research is a way of turning money into knowledge
Innovation turns knowledge into money
Research is about doing things for the first time
Innovation is about using known things for a new purpose
What do we mean by innovation?
You don’t know the results of research in advance
Innovation is always targeted on known outcomes
A key success factor for innovation is an accurate understanding of the unmet need it is targeting
• Innovation is the process of translating technology and knowledge into new, usable products and services
Innovation procurement?– Buying goods and services in a way that stimulates
the supply chain to invest in developing better and more innovative goods and services to meet the unmet needs of an organisation
The procurers view of innovation
Sensible procurers worry when they hear the word “new”
New products and services have risks. They might…..– not work as expected – not be delivered on time– cost more ….. and anyway, have no track record
We try to avoid innovation because it is risky
But in some cases (more than we admit) we have no choice – the
old solutions don’t fit anymore Many existing products and services cannot deliver what we need. If we keep buying them we will fail.
How can we buy new goods and services sensibly?
The suppliers view of innovation Developing new products incurs technical risk
and requires investments of time and money
Rational suppliers develop new products only if they have to e.g.– to protect margins– to win business – to retain business
Technical and resource risks are under the control of the supplier and can be managed
The risk that the supplier can’t control is:– Having developed the product will
someone buy it? – Is there a genuine and credible
demand?
Forward Commitment Procurement (FCP)
A practical innovation procurement (PPI) methodology
Identification
Market Engagemen
t
Procurement
“It is the lack of credible articulated demand that is at the root of the relative failure of innovation in the environmental goods and services sector”.
Dr Jack Frost, OBE
Risk to company
Government grant support
Development Demonstration Commercial sales Scale up
Revenues
Decreases as the product approaches
market and risks increase
Risk is at its highest when a
supplier needs to commercialise - the risk is high
because demand is not visible
Information that a real market exists reduces the risk and enables a
supplier to invest in anticipation of
future revenues
It is all about investment risk - not investment costs for a supplier Many products and companies fail at the demonstration and scale up stage The gap between development and commercial sales is often referred to as the ‘valley of
death’ - in fact it is more a mountain of risk………….
Stages in bringing a product to market
more
less
Why innovation procurement - the role of demand side measures - the suppliers perspective
EIAG 2006, developed by Whyles, van Meerveld, Nauta
2014
FCP thinking drawn from innovation policy, procurement professionals, UK Office of Government Commerce, and critically, suppliers
FCP mirrors the active approach to supply chain management taken by the private sector
– Clearly identify and articulate future needs
– Search out and engage with potential suppliers
– Provide a credible promise of future sales
– Provide demand side information and support delivery
– (while maintaining competition)– (compliant with the legal
framework)
The Forward Commitment Procurement Methodology
1. Identification
Recognise problems, unmet
needs & opportunities
Consult with stakeholders and
set up team
Define an outcome based
requirement
Prepare a FCP project
outline/business case
Project approval/sign off
2. Market Engagement
Market Sounding
Market sounding review & analysis
Supply chain feedback
Market consultation
Market consultation report
3. Procurement
Develop a pro-innovation
procurement strategy
Feedback to the supply chain and
stakeholders
Implement procurement
strategy
Negotiate Procurement
Contract
• PPI and PCP in action: Peer Learning WorkshopBirmingham, UK, Summer 2013
- Birmingham City Council- JERA - Technology Strategy Board- Contact: [email protected]
(Free)
The problem?
• 40,000 + mattresses to landfill / year
• High and increasing cost of disposal
• Sustainability targets not met
• Time consuming for staff
Unmet need?
• Zero waste mattresses – no cost increase
Outcome FCP?
• No mattresses to landfill
• Cost saving €5 million
Innovation in fabric, changing recycling process, ‘cradle to grave’ managed service
MINISTRY OF JUSTICE
Zero Waste Prison Mattress
ROTHERHAM NHS FOUNDATION TRUSTFuture Ward Solution
The opportunity?
• Ward refurbishment over 8 years
• Vision of CEO – hospital of the future
Unmet need?
• A ‘step change in the patient experience’
• Ultra efficient lighting, future ready, progressive improvements
• Cost effective based on whole life costs
ROTHERHAM NHS FOUNDATION TRUSTFuture Ward Solution
Outcome FCP?
• New off-site built solution
• Future ready for LED / OLED
• Same cost as traditional refurbishment
• Lower operational cost
Innovation?
• New product on the market
• Lighting technology: LED, and OLED Lighting design
• Off-site build
• And……new SME formed
RAWICZ HOSPITALLow Carbon Uniforms
The need and opportunity?
• Budget to replace uniforms
• Uniforms heavy and costly to launder
• User consultation showed uncomfortable, poor quality, not fit for purpose
Unmet need?
• Functional, attractive,and user friendly, easy to clean, durable, cost effective and environmentally sustainable.
RAWICZ HOSPITALLow Carbon Uniforms
Innovation?
• Eucalyptus fibre
• Biomaterials
• Eco-textile
• and….a local company!
Outcome FCP?
• New uniforms with lower whole life costs (-20%)
• Comfortable nursing staff
• Carbon reduction
• More sustainable
ERASMUS UNIVERSITY MEDICAL CENTRESustainable bed washing facility
Unmet need?
• Clean beds – 70,000 / year
• Resource efficiency
• Carbon reduction
• Cost effective
The need and opportunity?
• New hospital being built
• Old bed washer end of life and resource intensive
• No longer produced
Supplier consultation day at Erasmus MC
ERASMUS UNIVERSITY MEDICAL CENTRESustainable bed washing facility
Innovation?
• Robotic bed washing solution
• Steam jets patented
• Cross fertilization across supply chains
• and….an SME, can be applied to other cleaning needs
Outcome?
• Auditable bed cleaning
• Resource efficiency
• Carbon reduction (- 63%)
• Lower Total Cost of Ownership (-35%)
Innovation procurement v green procurement?
Green/sustainable procurement
Innovation procurement
(future ready for Organic LEDS)
Efficiency
Quality AND
Sustainability
An energy efficient bed bed lamp
Summary
Innovation is needed to enable society to adapt, overcome societal challenges and prepare for the future.– There is a wealth of untapped potential and creativity in the
supply chain– Many new and better products that deserve a market
The way we buy things can release or inhibit an innovative response Procurement as usual will not deliver what is needed.
FCP has proved to be a valuable framework to create new options and manage the risk of innovation. BUT it means thinking differently and changing the way we
approach procurement
