Leverage sustainable work and innovative solutions in your ecosystem

DanoneSince Danone’s started to involve their supplier at an earlier stage their innovative and sustainable work is thriving.

During 2007, Danone’s collaborative relationships significantly enhanced the company’s position in the fresh dairy segment. For example, the French company, Polaris, provided ingredients to Danone which contributed to the launch of Essensis, while Danone’s commitment to reduce packaging by 10% between 2000 and 2010 has actively been supported by Graham, an American packaging company, which helped reduce the packaging weight of a bottle of Actimel by half. Aside from these successes, the German ingredients supplier, Cognis, is also assisting with Danone’s health ingredient development and has dedicated 5 researchers to the company.

Antonio Trius, CEO of Cognis, explains the relationship as follows: “This partnership, based on collaboration at a very early stage of the product development, opens up a new innovation path. Because we were involved at the very beginning of the process, we manage, altogether with Danone, to define accurately & rapidly the right solution for the identified benefit.”

So how does Danone manage to bring in all of this outside expertise?

In short, Danone started to audit its purchasing function  and ended up re-engineering its processes towards a strategy of structured partnerships.  This concept is often referred to as an ecosystem of partners, where the partner companies engage in a symbiotic relationship where they constantly leverage each other’s strengths and capabilities. The concept involves the inclusion of suppliers from the very early stages of product development and exclusive cooperation agreements are often signed with key suppliers.

Crossfunctional teams of marketing, R&D, and purchasing functions are then assigned to certain innovation platforms.  Danone is keen to exploit its relationships in this way because it recognizes that the specialized R&D resources that exist in many of its suppliers are lacking within its own organization. In evangelising Danone’s progress with its partners, Philippe Bassin, Purchasing Director, Fresh Dairy Products says, “these new relationships with suppliers enable us to build our strategy over the long run and focus on innovation – a key element of the company’s competitiveness.”

According to David Ricardo’s theory of comparative advantage, the practice of engaging 3rd parties in the supply chain has been in use since at least the early 1800’s. According to Ricardo, manufacturers should only specialize in what they can produce more efficiently than anyone else – otherwise one should engage a more efficient producer. In today’s global climate where competition is fierce, these rules are becoming increasingly relevant and complicated. Increasingly more companies are looking to involve 3rd parties as early in the evolutionary process as possible in order to sustain their competitive edge and not to fall behind in their sustainable work. It’s no secret that many companies need to turn to their suppliers in order to keep their operations running smoothly and enhance their sustainability agenda efficiently. Indeed.

Kind Regards,

Annelie Andersson

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2 Comments

  1. Posted January 8, 2011 at 8:35 pm | Permalink

    Royal Takeaway Clayton
    I have been reading your articles during my lunch break, and I have to admit the whole article has been very valuable and very well written.I also found a lot of stuff in your pages especially it’s discussion.I think I will come back soon.

    • Annelie Andersson
      Posted January 11, 2011 at 10:17 am | Permalink

      Thank you very much!
      Which parts do you find most interesting and useful for your business?

      Annelie Andersson


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