Fraunhofer ISI develops new instrument to evaluate the innovative capacity of suppliers

February 16, 2016

The Fraunhofer Institute for Systems and Innovation Research ISI has developed a new procedure that can be used to continuously assess the innovative capacity of supplier companies. Suppliers, in turn, receive important feedback about their innovation potential in areas like “Innovation culture and strategy”, “Competence and knowledge” or “Process and project management”. The evaluation instrument is already being used successfully for the Supplier Innovation Award of the Deutsche Bahn AG, which is presented to particularly innovative suppliers for their achievements. Applications for the Innovation Award are open to DB suppliers until 10 March 2016.

In order to remain competitive, companies have to continuously evolve and innovate. While they can positively influence their own innovations or optimize company-internal processes, they usually have no insights into or influence over the innovative capacity of their suppliers. And yet the quality of products and services is often decisively influenced by these suppliers, which can make companies partially dependent on them.

In this context, the Fraunhofer ISI has developed an assessment instrument that enables a company to determine and evaluate the innovative capacity of its suppliers. In addition, the instrument permits the continuous assessment of suppliers and shows them opportunities to expand and better exploit existing innovation potentials. The suppliers find out how innovative they are and where improvements are necessary – especially in comparison to other companies.

The evaluation instrument uses data collected every two years as part of a company survey, and is based on 60 indicators. Seven important organizational fields are derived from these indicators which are used to rate suppliers: Alongside “Innovation culture and strategy”, “Competence and knowledge” and “Technology“, these include “Products and services”, “Process and project management”, “Networks and cooperation” and “Market”. The data provided by the companies on these seven fields ultimately result in an overall indicator, which can be used to rate the supplier’s current innovative capacity.

Dr. Djerdj Horvat, who heads the project to develop the evaluation procedure at the Fraunhofer ISI, emphasizes its strategic significance: "The evaluation instrument we developed helps both a company and its suppliers: The suppliers profit from an external assessment of their innovation processes, are able to optimize these and improve their services to key clients. For company management, the assessment tool acts as a kind of innovation radar, which gives them better control over the company’s strategy and long-term success."

The evaluation instrument is already being successfully applied in the Supplier Innovation Award, which the Deutsche Bahn AG is presenting to particularly innovative suppliers for the first time in 2016. The Award recognizes those innovations that have had a particularly positive impact on the Deutsche Bahn’s services in the past, increased the degree of novelty or added value, were easy to apply or very sustainable. These include innovative services or marketing solutions as well as new technologies, processes or products.

DB suppliers can send in their application for the Award up until 10 March 2016, and describe which innovations they have made in pilot schemes, supply contracts or development projects. Each supplier may submit a maximum of three applications.

The Fraunhofer Institute for Systems and Innovation Research ISI analyzes the origins and impacts of innovations. We research the short- and long-term developments of innovation processes and the impacts of new technologies and services on society. On this basis, we are able to provide our clients from industry, politics and science with recommendations for action and perspectives for key decisions. Our expertise is founded on our scientific competence as well as an interdisciplinary and systemic research approach.