Managing Startup Suppliers CIPS-Event "Supply Chain Startups: - PowerPoint PPT Presentation

Managing Startup Suppliers CIPS-Event "Supply Chain Startups: Reality Check" Zurich, October 29, 2019 Prof. Dr. Stephan M. Wagner Chair of Logistics Management Swiss Federal Institute of Technology Zurich 1

Agenda 1 Introduction to ETH Zurich and our Research Group 2 Interaction between Corporates and external Startups  Why and how 3 Startups in the Supply Chain and as Suppliers  Journey of our Research on Startups in the Supply Chain  Managing Startup Suppliers  Startup Programs Implications for Purchasing Managers  2

Agenda 1 Introduction to ETH Zurich and our Research Group 2 Interaction between Corporates and external Startups  Why and how 3 Startups in the Supply Chain and as Suppliers  Journey of our Research on Startups in the Supply Chain  Managing Startup Suppliers  Startup Programs Implications for Purchasing Managers  3

Areas of Expertise and Research Supply Logistics Product Market Market Market Strategy Logistics Networks Suppliers Service Customers Providers Relationships Innovation Purchasing and Logistics and Business Supply Transportation Marketing Entrepreneurship Management Management Management Digitalization Supply Chain Management Supply Chain Management Sustainability Humanitarian 4

Current Research Topics taken up in Projects Examples Understanding … Digitalization Humanitarian Sustainability Startup Firms (e.g., 3D printing, Logistics and and Ethics blockchain) Operations … in Supply Chains 5

Just launched – The HumOSCM Lab 6

Impact of our work: Research Output over Time Research output and recognition increasing over time Number of citations (Google Scholar) Number of citations (Web of Science) 1600 700 1400 600 1200 500 1000 400 800 300 600 200 400 100 200 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (27.10.2019: Σ 10.686, h=51) (27.10.2019: Σ 3.757, h=33) 7 Sources: Web of Science Citation Report; Databases considered: SCI-Expanded and SSCI; timespan – 27.10.2019 Google Scholar; timespan – 27.10.2019

Agenda 1 Introduction to ETH Zurich and our Research Group 2 Interaction between Corporates and external Startups  Why and how 3 Startups in the Supply Chain and as Suppliers  Journey of our Research on Startups in the Supply Chain  Managing Startup Suppliers  Startup Programs Implications for Purchasing Managers  8

Why collaborate with Startups (1)? Startups as Sources of Innovation Trend I: Disruptive and faster changing technologies Adjustment and replacement of traditional technologies Big Data Analytics Alternative Drives Automation und Digitalization H 2 Robotics Health technologies  Prosthetics Artificial Intelligence  Blood pressure monitoring  … Environmental technologies Tracking und Tracing  Power to gas Technology:  Energy storage Blockchain, Low-Cost- …  Sensors, IoT, 5G 9 Source: Wagner (2019); Olsen & Tomlin (2019)

Why collaborate with Startups (2)? Startups as Sources of Innovation Trend II: Changing Ecosystems • Increasing product variety and customization • Increasing product complexity • Shortened product lifecycles • Platform economy and sharing economy • Demand for sustainable value chains and products • Entrance of new businesses/competitors • … Increased Innovation Pressure • Open Innovation (External sources to complement internal innovation activities) • Startups as sources of external innovation 10

Interaction of Corporates & external Startups Corporate Involvement M&A Acquiring the Startup and its technology Startup Supplier/ Corporate Corporate Incubator Accelerator Venture Client Integrating Startup in Startup Developing Startup Developing Supply Base or Co- & Pilot Project Development Corporate Venture Capital Investment in Startups Startup Events & Competitions Network and Ecosystem Building Startup's Maturity Stage Financial No financial 11 Investment Investment Source: Fink (2018)

Agenda 1 Introduction to ETH Zurich and our Research Group 2 Interaction between Corporates and external Startups  Why and how 3 Startups in the Supply Chain and as Suppliers  Journey of our Research on Startups in the Supply Chain  Managing Startup Suppliers  Startup Programs Implications for Purchasing Managers  12

Journey of our Research on Startups in the Supply Chain Logistics Startups Logist ics Startups Strategic and Strateg and operat operationa ional l Toward a bett Toward a better understanding er understanding Kurpjuweit, Klöckner, Seeßle, & Wagner det determin rminants ants of of relation relationsh ship ip of corporat of corporate accelerator models e accelerator models (Case Study) outcomes outcomes with with new ventur new venture e Moschner, Fink, Kurpjuweit, Wagner, & Herstatt suppliers suppliers Startup Supplier's IP Startup Supplier's IP Protection Protection (Case Study) Zaremba, Bode, & Wagner Fink & Wagner Collaboration with TU Hamburg (Survey) (Case Study) Selectin Sel ing Innovat g Innovative ive Managi Managing Startup g Startup Lever Leveragin ging Startup's Startup's Suppl Supply Chains y Chains Feng & Wagner and Startup and Startup Suppl Supplier Suppliers ppliers 2015 2017 2019 Constantin Brachtendorf Wagner, Kurpjuweit, & Choi Logistic Logist ics Acceler s Accelerator tor (Experiments) (Case Study) Fink, Räder,& Wagner CAPS Research, (Case Study) Arizona State University Leveragin Lever ging Suppl Supply Chains y Chains New New Ventur Venture Partnerin e Partnering Startup Supplier Programs Startup Supplier Programs for New for New Ventur Venture Growth e Growth 2016 Capab Capabilit lity 2018 … Kurpjuweit & Wagner (Case Study) Ingmar Zanger Zaremba, Bode, & Wagner (Case Study) (Case Study) A Typolo A Typology gy of of Establis Established New Kids on New Kids on the the Block: Block: Firms' Suppli Firms' Supp lier Sel Selection ion Sel Selectin ing New New Approaches Approac hes Ventures as Ventur es as Supp Suppli liers ers Kurpjuweit & Wagner Zaremba, Bode, & Wagner (Case Study) (Survey) Originated at Originated at ETH Zuric ETH Zurich's 's Chair of Chair of Logis Logistics Management ics Management 13

What do we consider as a Startup Supplier? Younger than 8 years (Song et al., 2008) Possesses a self-developed product or service which might improve the established firm's core business Aims to have a (or has an existing) B2B sourcing relationship Focus on creating innovation , growth, and a scalable business model More than one employee or founder, i.e. we do not include single entrepreneurs or inventors Independent from the buyer 14 Source: Fink & Wagner (2019)

A Startup Supplier (1) Example Startup Supplier Established Buying Firm 15 Source: https://www.deutschebahn.com/en/Digitalization_new/startups/db_startups/weichen-3520602

A Startup Supplier (2) Example Startup Supplier Established Buying Firm 16 Source: https://aito-touch.com/

Not a new phenomenon: Innovation and Productivity Suppliers at Siemens Example 1 Technologies/ideas Innovation "Start ups, spin offs" suppliers 2 Innovation suppliers Solutions + Productivity suppliers 3 Products Productivity suppliers "Established firms" 17 Source: Wagner (2010)

Differences between established Suppliers and Startup Suppliers Established Suppliers Startup Suppliers Resources  Affluent in resources  Short of resources Relationship with  One of many  Matter of survival Buyer Decision Making  Slow, decentralized  Speedy, flexible Organization  High degree of formalization  Low degree of formalization  More levels, barely horizontal,  Fewer levels, more horizontal, Communication infrequent frequent Legitimacy  More  Less History/Track  Sufficient  Scarce Record Routines  Routines exist  Lack productive routines Need to adapt purchasing processes and relationship management 18 Source: Wagner et al. (2017)

Competitive Priorities: Firms seek from Startup Suppliers Flexibility and Innovation Goals: Start-up vs. other suppliers Less Equally More emphasized emphasized emphasized Flexibility 8% 17% 75% Innovation 9% 16% 75% Firms expect more from startup suppliers in terms of flexibility Cost (reduction) and innovation compared to established suppliers 14% 25% 61% Delivery 12% 37% 51% Quality 13% 47% 40% n =123 19 Source: Wagner et al. (2015)

Product Type for which Startup was selected as Supplier Very low/low Medium High/very high Importance for firm 14% 19% 68% "Product- Criticality for production 36% 20% 44% priority" Profit impact Startups are selected 36% 23% 41% as suppliers for 0% 20% 40% 60% 80% 100% important products Very low/low Medium High/very high Innovativeness 26% 22% 52% "Product- Complexity 30% 21% 49% complexity" Technical requirements Startups are selected 32% 27% 41% as suppliers for 0% 20% 40% 60% 80% 100% innovative and n =96 (start-ups selected) complex products 20 Source: Wagner et al. (2015)