Time for a frank conversation? Starbucks, Molson Coors & Abbott Nutrition debate simpler specs and trusting your suppliers

By Elaine WATSON

- Last updated on GMT

Does the relationship between R&D and procurement needed to be better managed?
Does the relationship between R&D and procurement needed to be better managed?
Being circumspect when you talk to suppliers is one thing. But being so afraid of giving away your innovation pipeline that you leave them in the dark about your goals is plain counterproductive, according to R&D bosses at Starbucks, Molson Coors and Abbott Nutrition.

In a refreshingly frank panel debate on the final day of the 2013 Food Technology & Innovation Forum in Chicago last week, innovation leaders at all three firms admitted that a lack of trust and a failure to share information had hampered collaborations with trading partners in the past.

We need more information to help you. We’re on the same team

Dr Robert Fisher, VP global technology & innovation at Molson Coors - and former R&D president at Tate & Lyle - said that when he sat on the other side of the fence, he often felt customers were being unnecessarily secretive, hampering his team’s ability to develop the best solutions to their problems.

While protecting your intellectual property is critical, he said, in most cases, neither party is engaged in “rocket science”​ and a failure to share information that would help suppliers understand your strategy does neither party any favors.

He added: “We need more information to help you. We’re on the same team. Of course, there are confidentiality agreements, and if you break them, you won’t stay in business very long, but we need to strike a balance.”

He added: “Trust your suppliers until they prove you wrong.”

Don’t over-spec… Give us more flexibility’

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Suppliers are more effective if you give them the information they need to get the job done, said Dr Bob Fisher

As for procurement, another barrier to good collaboration is a tendency to ‘over-spec’, he said.

If manufacturers insist on specifying 50 things they want - instead of the three most important things they actually need - they will pay extra, and won’t necessarily get the best solution, he said.

“Give us more flexibility.”

‘Then you get the call from the procurement guy and the hammer comes down…’

However, one of the biggest frustrations for suppliers is when they have a productive meeting with R&D counterparts at a customer, which is then followed up by a “call from the​ [customer’s] procurement guy - when the hammer comes down”, ​said Dr Fisher.

Steve Chandler, former VP product and process technology at Starbucks - who has also worked at Frito-Lay, Kellogg, Sara Lee and Diageo - admitted there is always a tendency to think you’re sitting on the R&D crown jewels as a big branded food or beverage player.

In reality, however, this is rarely the case, he said. “I’ve been doing this for 20 years. We all think we’ve got something so unique. But we don’t really. We need to be open and trust our suppliers.”

If I need a solution fast, I don’t want procurement to come in and beat our suppliers up

As for hammering suppliers on cost, he said that the relationship between R&D and procurement needed to be better managed to ensure there is a win win for both parties on a commercial front.

He added: “If I need a solution fast, I don’t want procurement to come in and beat our suppliers up.”

Simplify your specs and you’ll improve margins

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Dr Matthew Roberts: Simplify your specs!

Dr Matthew Roberts, divisional VP, global formulations & R&D at Abbott Nutrition, meanwhile, offered delegates some advice on how to manage costs without screwing people.

As per Dr Fisher’s comments, a key step is simplifying your specs, he said. “Simplify your specs and you’ll improve margins.”

Firms should also consider whether cleaning up labels could save them cash, he said. “Could a protein also act as a stabilizer?”

He also advised firms to pre-qualify multiple ingredients and suppliers, to prevent chaos erupting when your hand is suddenly forced should the price or availability of ingredient X mean you have to turn to ingredient or supplier Y - fast.

Finally, he predicted a world of increasing ‘mass customization’ - the perfect example of which is in the chocolate industry - where a handful of companies supply everyone else with bulk chocolate mass, which they then customize to deliver distinct products, providing superior efficiency through economies of scale, he said.

THE PANELISTS:

Steve Chandler​: Former VP product and process technology at Starbucks (middle)

Dr Robert Fisher​:  VP global technology & innovation at Molson Coors (far right)

Dr Matthew Roberts​: Divisional VP, global formulations & R&D at Abbott Nutrition (left)

Dr Sanford Wolgel (chair)​: Consultant in the office of technology and IP at the University of Chicago (far left at podium)

For more coverage of the 2013 Food Technology & Innovation Forum, which is organized by WTG Group, click on the links below:

Are all-natural claims losing their luster?

Hershey's Kisses are smoother, and ‘significantly less sweet’ in China, says R&D boss

Food Technology & Innovation Forum 2013: Natural claims, mindless eating and Hershey's Chinese adventure... DAY ONE

Food Technology & Innovation Forum 2013: Nestlé on GMOs, the added sugar debate and McDonald's oatmeal slam dunk ... DAY TWO

Related topics: People, Healthy Foods, Beverage

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