As 2014 comes to a close and another new year begins, it makes sense to ask a simple question: How will next year be different from this one? One change could involve fostering a stronger spirit for supply chain innovation.
Things such as big-data analysis, a wide array of open online courses at top universities, a growing awareness of and emphasis on reverse and frugal innovation, and the conversation around net neutrality all present new opportunities for supply chain professionals and the departments they oversee.
Don't roll your eyes just yet. I know innovation is often thrown out there as a buzzword, a sort of cure-all soluton without any real teeth. But I was struck by a few key points mentioned in a recent Wharton blog post. It got me wondering about how far innovation can reach and, as the article's title asks, whether geography matters anymore when it comes to nuturing innovation.
One particular part of the article drove home something we may not think about too often, because we get wrapped up in all the news coming out of Silicon Valley, Silicon Alley, Silicon Roundabout, Silicon Oasis, or your other favorite hub of technological inspiration:
What we're seeing here is a paradigm shift that goes beyond the current approach that looks for hotbeds of creativity. Why does geography feel less critical to innovation these days? The reason, in part, is that all elements of innovation — the innovation value chain, as it were — are slowly decoupling from their traditional physical underpinnings. The innovation value chain — insight, inspiration, design, development and implementation — is shifting to become increasingly virtual and personal.
Look at that last line again: The innovation value chain is shifting to become more virtual and personal. And tie it to the previous concept that the value chain is being decoupled. The way I read that is a wave of change is coming. Whoever embraces this widespread decoupling and personalization to drive more innovative startegies will be doing a victory dance sometime soon.
Supply chain professionals already know some of this. For years, rather instinctively, they have had to balance the need people feel to create personal relationships with customers and suppliers with relying more heavily on automatically generated exception data to handle production, supply-demand, or delivery glitches. But that doesn't mean supply chain professionals are thinking innovatively. Many are just trying to stay on top of current supply-demand swings and put out whatever fires burn them on any given day.
But there are examples of how companies are innovating all around us, both in the tech sector and elsewhere. Renault, for instance, launched a no-frills, low-cost car that was supposed to head off to emerging markets, but it turned out being a hit in Western Europe, where people where hard hit by the recession. That led to a turnaround in the company's startegic thinking, according to Harvard Business Review post. Likewise, look at this story about how an industrial company worked with a local supplier to build capacity instead of routing business offshore.
All this looks good on paper and even better when you think about it from a product design and revenue-building point of view. The trick is figuring out how can it become a reality on the supply chain side. To have a real impact, innovation must go far beyond lip service. It needs commitment, patience, time and resource investment, and a willingness to experiment.
Maybe the way to start getting there is to sincerely answer these questions and find a way to address these gaps:
- How is your supply chain team learning about all these new opportunities waiting to be seized? What kind of learning mechanisms are in place to capture and experiement with new ideas?
- How are your teams' skills being adapted to deal with a virtual and highly personalized value chain?
- What kinds of big-data analytic tools are available to create a more innovative supply chain approach?
- How can you do better with less? How can innovative supply chain practices build on the concepts of affordability, quality, and sustainability?
Let me know what supply chain innovation means to you.