Free Essay: How Technological, Philosophical and Operational Innovation Can Realign the Practice of Procurement

Published: 2022-04-19
Free Essay: How Technological, Philosophical and Operational Innovation Can Realign the Practice of Procurement
Type of paper:  Essay
Categories:  Technology Supply chain management
Pages: 7
Wordcount: 1757 words
15 min read

Innovation refers to changing processes or creating processes that are more effective as well as ideas and products. Innovation is a means in which people come up with new ways of doing things. Implementing innovation in a business setting plays a significant role since it helps the business to save money as well as time. Innovation helps a business to have a competitive advantage to grow and adapt in the marketing environment. Innovation can also be used in business to improve the processes and enhance the function of the supply chain through optimization. In the current world that we are living in it is imperative for businesses to innovate new ways to optimize productivity and streamline their supply chain. Technological, philosophical, and operational innovation can realign the practice of procurement and make it more efficient and effective.

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Technological Innovation

Technological innovation can realign the procurement practice and make it more efficient and effective. The complexity of managing supplier portfolios which are also associated with the need to use strategies that will help in saving costs tend to lead most organizations to contract with a small group of suppliers. Technological innovation can be used to help eliminate such barriers to help a business or organization in the building of partnership foundations with main suppliers and as well as also maintaining links with other smaller suppliers. Modern technologies can improve on the functioning of the supply chain as they can help in creating better visibility within the supply chain and therefore enabling one to stay ahead of the competitors and allow the management to have more control of the business (Sambamurthy, Bharadwaj and Grover, 2003).

The Internet-based software is one of the technological innovation that can help in simplifying the supply chain process and hence reducing the shipping errors that could be encountered significantly. The introduction of Flash view is one of the technological innovation has helped in managing of the supply chain since it has assisted business owners to be in a position of consolidating all of their supply chain aspects into one place. This innovation has helped in enhancing easy retrieval of data. The Flash View software is also a technological innovation that has helped business owners to be able to organize inventory data digitally, manage the shipping of the goods and tracking information of the products from the warehouse to the distribution centers and as well as create electronic invoices easily.

Tracking of Goods Using the Flash View

Technological Innovation is important in the practice of procurement since it helps business owners to be able to track their products and inventories which help in reducing theft cases. For example through the use of a Radio Frequency Identification the chips are placed on the goods and products, and this enhances the tracking process. The Radio Frequency Identification chips help in enhancing a product management system that is computerized and therefore assisting in the elimination of potential errors, reducing operating costs and simplifying the supply chain. This technological innovation helps in detection of any order problems and anomalies that may occur in procurement and the supply chain process on time enabling those responsible for correcting those mistakes immediately.

The technological innovation can also help in realigning the practice of procurement since it helps the customers to be in a position to track the status of their orders. This is most important in a situation where a customer purchases their goods from online shops. Technological innovation helps the customers to be notified when they will receive their goods and when the goods are dispatched from the shops through receiving of texts or emails (Gunasekaran and Ngai, 2004).

Technological innovation can also realign the practice of procurement by reducing the unnecessary links that could be involved. Reduction of supply chain links helps in reduction of expenditures that could be incurred while purchasing a given product. For example through the use of the social media such as Facebook, Twitter or LinkedIn a person can work directly with the manufacturers of a given product without having to involve an intermediary source or purchasing through an intermediary since that could increase the price of that particular product. Reducing of supply chain links also enhances the safety of a product as it lowers the shipping and receiving links. This is possible through technological innovation (Wu, Yeniyurt, Kim and Cavusgil, 2006).

Philosophical Innovation

Philosophical can help in aligning the process of procurement. In the past procurement mostly focused on the operational mechanisms that were used in relationships that were dyadic whereby the parties involved could influence each other. Three main philosophies can significantly help in alignment of procurement practice. These philosophical innovations that can help in aligning procurement include the transaction-cost economies, interactions approach and the much growing and broader relational approach. The philosophical innovation approaches assist the business owner to mainly focus on the value that the suppliers and buyers get after a given transaction. The implicit view of value does not allow the businesses owners to understand the elements of value that they are required to achieve to sustain relationships with the suppliers or buyers (Tan, 2001).

Philosophical innovation plays a significant role in aligning the practice of procurement since the buyer can have an enhanced understanding of the wants and needs of the supplier. Understanding the sources of the supplier value is essential in acquisition since it assists the buyers to be in a better position of managing a range of interactions that take place between the buyer and the supplier and develop them to gain a strategic competitive advantage.

Philosophical innovation is important in aligning the practice of procurement since it helps in addressing gaps in the past flaws of the function by having a new process of implementation being managed by a skilled person, for example, a CPO. Such philosophical innovation helps in the breakdown of corporate silos and therefore enhances the value of a supply chain through various procurement strategies and activities. The Philosophical innovation also helps in the creation of awareness regarding the importance of procurement towards a given market and product (Soosay, Hyland and Ferrer, 2008).

Philosophical innovation has helped in the understanding of how procurement teams affect the top and bottom-line growth of a supply chain through various activities and strategies. The decision making and management of the Chief Privacy Officer is considered as being important to the proposition value of the companies.

The philosophical innovations have enhanced the understanding as to why the procurements focus has shifted from cost efficiency to establish a fair value. Procurement teams are required to work to ensure that their process of procurement is taking places in contexts that are sustainable and also to help in establishing a fair value (Christopher, 2016).

The philosophical innovation has helped the business owners to understand that there has been a shift in the market whereby a large number of suppliers have adopted sustainability as being a philosophy that is operational which has caused the change in market strategies and pricing of products.

Operational Innovation

Companies have worked towards cutting costs through operational excellence since the industrial revolution started to take place. Operational innovation is considered to be much different than operational excellence.Operational innovation can help realign the practice of procurement since it is a step by step approach that helps the procurement manager to benchmark outside the industry.

Operational innovation can help the procurement manager to align the practice of procurement in an organization. Operational innovation helps the procurement manager to come up with new ways of developing products, providing customer service, filling orders or performing any other activity that is carried out within an organization. This enhances a systematic operation of the business.

Through operational innovation, an organization or business can understand better how they can purchase and distribute goods to the consumers. One of the operational innovation that can help in the alignment in the practice of procurement is cross-docking. Through the use of cross-docking, the procurement manager can truck goods and products from the suppliers to a distribution center whereby the goods are transferred to trucks bound for stores immediately without necessarily having to be placed into storage. The cross-docking is an example of an operational innovation which has led to lower levels of inventory and operating costs and hence resulting in low prices for the products. The logistics of cross-docking activity is that it attempts to reduce the total lead time and costs. In cross-docking, the goods are normally received from the vendors and then stored in devices such as racks or shelves whereby when a customer or buyer requests for the item to purchase it is sent from the shelf and sent to the customer's destination. Implementation of operational innovation in business is of great significance as they result in achieving extraordinary results (Min and Zhou, 2002).


In conclusion, it is important to adopt the emerging technologies to improve the operation of a business and improve the procurement process that is involved in the operation of the business. Use of modern technologies in the business helps in enhancing its productivity as it reduces the costs incurred in the procurement process and also enhances client retention and customer satisfaction. Philosophical innovation is of great importance in the alignment of procurement practice as it helps the suppliers and buyers of the goods to understand the various changes that are occurring in the market and also the change in consumer behavior. Philosophical innovation has helped in the understanding of how the top and bottom-line growth of a supply chain is affected by the procurement teams through various activities and strategies. Operational innovation is of importance in the practice of procurement since it enhances the systematic operation of the business through activities such as filling orders, providing customer service and performing other organizational activities.


Christopher, M., 2016. Logistics & supply chain management. Pearson UK.

Gunasekaran, A. and Ngai, E.W., 2004. Information systems in supply chain integration and management. European Journal of Operational Research, 159(2), pp.269-295.

Min, H. and Zhou, G., 2002. Supply chain modeling: past, present and future. Computers & industrial engineering, 43(1-2), pp.231-249.

Sambamurthy, V., Bharadwaj, A. and Grover, V., 2003. Shaping agility through digital options: Reconceptualizing the role of information technology in contemporary firms. MIS quarterly, pp.237-263.

Soosay, C.A., Hyland, P.W. and Ferrer, M., 2008. Supply chain collaboration: capabilities for continuous innovation. Supply Chain Management: An International Journal, 13(2), pp.160-169.

Tan, K.C., 2001. A framework of supply chain management literature. European Journal of Purchasing & Supply Management, 7(1), pp.39-48.

Wu, F., Yeniyurt, S., Kim, D. and Cavusgil, S.T., 2006. The impact of in...

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