Stimulation of Innovations

Encouraging continuous improvements or innovation with suppliers impels the suppliers to reduce costs, which has an effect upon the improvement of Iskra Avtoelektrika d.d. operations as well as upon the operations of the supplier.

Cooperation in the innovation process also enhances respect and trust in the supply chain, and this is essential for all long-term business relationships.

Why Innovation with Suppliers?

• Suppliers best know the products they are manufacturing,
• They identify the sources of costs most easily,
• They best know modern technologies in their field.

Innovation promotion is intended to be a method to engage the supplier to become more directly involved in the initiatives for cost reductions. The process itself permits the suppliers to submit all the proposals and initiatives for the reduction of product and/or service costs directly to the Purchasing Department. Stimulation of innovations is included in the system of supplier evaluation as one of the aims of competitive pricing.

The advantages of innovation encouragement are the following:

• Active involvement of the supplier as early as the design phase of the product, which shows our appreciation and consideration of this supplier
• Reduction of costs
• Sharing of savings
• Opportunity for business expansion

Fields of Innovation

• Product development (design, materials, new technologies),
• Production (increase of productivity, reduction of inventories),
• Purchase (purchasing conditions, selection of sub-suppliers),
• Logistics (packaging, returnable packaging, transport),
• Quality (elimination of errors and additional work, direct deliveries).

The supplier submits plans and/or suggestions for the reduction of costs for products or services supplied to Iskra Avtoelektrika d.d. on a form used for recording them in the Purchasing Department.

The Strategic Business Unit, affected by the suggestion, reviews the suggestion and prepares its opinion about it within the envisaged period of time. The work coordinator from the Purchasing Department notifies the supplier whether the suggestion has been accepted, approved or rejected.

All accepted or approved suggestions have a positive impact on the evaluation of the supplier's competitive pricing.

The main goal of the promotion of innovations at the supplier's and of the introduction of the supplier evaluation system is to achieve continuous improvements and reduction of costs within the entire supply chain. This implies an increase of the competitive advantage of Iskra Avtoelektrika d.d. and also the long-term stability of the supplier.