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Innovation Experiments in a Boom & Bust Environment

Most supply chains do what they were designed for. They move and monitor parts, track inventory levels, and provide at least some insight into quarterly supply-demand requirements.

However, since supply chains, and the people behind them, have adapted relatively well to changing market conditions, cyclical economic booms and busts, and whatever else has cropped up in the last decade or so, executives keep expecting to glean even more from these operations. They anticipate innovative supply chain practices to drive financial growth, increase competitive advantage, and advance other strategies on the corporate agenda. The key phrase, though, is “innovative supply chain practices.”

As on the products and services side, supply chain improvements need to stay on the cutting edge to accomplish these worthy goals. The problem is that supply chains of yesteryear need an upgrade. And I’m not talking about the kind of upgrade that comes out of nicely packaged boxes of software.

To get where the supply chain needs to go next, supply chain experts need to examine the entire thought process embedded in current practice and experiment with new concepts. Perhaps, the electronics supply chain could use a dose of what Tim Brown, chief executive officer and president of design consultancy IDEO, calls “design thinking.”

On the recent recommendation of a few colleagues, I’m reading Brown’s book Change By Design (Harper Business, 2009), which provides a conceptual blueprint for how companies can apply a non-linear, creative problem-solving approach to all facets of business.

As Brown describes it, design thinking is “fundamentally an exploratory process,” where inspiration, ideation, and implementation overlap and feed an innovation continuum. Though he comes at it from a designer’s point of view, he’s quick to explain how the principle has broad benefits: “The mission of design thinking is to translate observations into insights and insights into products and services that will improve lives.”

In the book, Brown advises companies on how to look beyond their established constructs to recognize patterns, develop forward-thinking environments, and enhance the product and customer service experience. In particular, he cites two examples relevant to the electronics industry. {complink 2657|Intel Corp.}, for instance, has a team of researchers and social scientists that study various societal issues, such as the future of digital money and street life in a multinational metropolis.

Similarly, {complink 3847|Nokia Corp.} funds research related to human behavior and innovative ethnographic techniques. For these companies, the research goes far beyond trend-spotting and “coolhunting,” and insights drawn from it provide a baseline for future product planning and development, Brown writes. By understanding what’s happening on the ground and analyzing a multitude of scenarios through different lenses, Intel and Nokia can get a better sense of how their technologies may be used a decade from now.

If tech companies are taking such proactive steps to innovate end products and services, the question arises: Shouldn’t the supply chain mirror those efforts? How involved are supply chain experts in experimental leaps aimed at transforming entire organizations or product lines (obviously, whatever ultimately comes out of the product development silo will touch the supply chain)? Indeed, a supply chain is a living organism worthy of evolving in a way that provides insight and maybe even improves lives, not just profits and revenues.

9 comments on “Innovation Experiments in a Boom & Bust Environment

  1. AnalyzeThis
    October 29, 2010

    The problem with experimental leaps is sometimes the experiment fails and someone breaks their leg.

    I think it isn't unusual for some of us to shy away from experimental changes despite their potential for dramatic improvements not just out of a natural fear of change, but due to fear of negative, disastrous consequences if things don't work out the way we envisioned.

    I completely agree with you about a supply chain being a living organism. So I believe it is natural to sometimes be weary of championing initiatives that could potentially kill it.

    Anyhow, my apologies for the risk-adverse thoughts… good article, and thanks for the book recommendation!

  2. Ariella
    October 29, 2010

    I can't recall every having seen the word “ideation” before.  While many pay lip service to thinking “outside the box,” it is rare to truly break out of fixed patterns of thought.  That involves more than taking a risk but letting go altogether of familiar approaches that seemed to have worked before.

  3. maou_villaflores
    October 31, 2010

    Ideation is the process of making ideas :-). Thinking outside the box is really risky but most of the time you need to take the risk to introduce a change that will take you to the next level.

  4. Backorder
    October 31, 2010

    How about a Super computer based modelling system(assuming we have a budget) that takes inputs from the past two decades and then models out the supply-demand patterns for the immediate future! If that fails we can always fall back on Astrology or Tarot cards to predict whats coming. 😀 

  5. Jennifer Baljko
    November 2, 2010

    Hi DennisQ,

    Thanks for the post. I hear you on this natural fear of change, uncertainty, and less-then-perfect consequences. These are major hurdles for business and individuals alike, and often difficult to overcome or move beyond. But, arguably, nearly all of the technology we have today was developed in risk-adverse environments to some extent or another. Powerhouses like Google, HP, Apple, Dell and Microsoft, to name just a few, came from humble beginnings and grew because visionary leaders were able to manage the risk-innovation-profitability crossover. Even on the supply chain side, companies that many years ago bucked trends and implemented things like lean supply chain strategies or engaged with external manufacturing partners took unprecedented risks that not only had monetary payoffs, but also reshaped practices throughout the entire industry.

    In an industry where so much success is directly linked to how well company leaders manage risk, particularly on the product side, I often wonder why companies seem to be paralyzed when it comes to making necessary supply chain changes? It has to be more than a fear of change, uncertainty or profit-loss that stalls supply chain development. To me, it often looks more like a laissez-faire, if-it's-working-don't-fix-it attitude that has taken hold, and I think that attitude potentially has worse consequences than risk-adversion.

     

  6. Jennifer Baljko
    November 2, 2010

    Hi Ariella,
    Thanks for the post. You’re right. This fixed pattern of thought provides a great amount of comfort, and it’s difficult to change this thought habit, especially when it reaps desired rewards or keeps the supply chain executive out of hot water. In his book, Brown encourages using a three-word phrase when analyzing a challenge. He frames the fundamental question around “How might we” and builds off that. Following his lead and with the hope of encouraging additional dialog with you and others on this site, I’ll ask: How might we in the electronics industry begin to shift fixed patterns of thoughts? How might we manage risk in a way that better supports supply chain innovation? How might we improve the supply chain environment to encourage idea sharing without jeopardizing the company’s bottom line?

  7. Jennifer Baljko
    November 2, 2010

    Hi Maou,
    Thanks for the post.  Exactly, ideation is idea-making in an environment where people feel comfortable enough to share their ideas. On the flip side, there is also a realization that not every single idea can always be acted upon or invested in. Instead, there’s an understanding that idea-swapping has value within the organization, and can play a vital role in getting new strategic initiatives to stick.

    Additionally, I don’t know if thinking out of the box – just the thinking part – is too risky. I think it’s the actual execution and implementation part is the risk many executives want to avoid – actual failure or the fear of failure comes at too high a price. That said, I understand, too, that many executives and the power structures that support them may not prefer to have the rank-and-file throwing all sorts of ideas into the mix. Keeping the status quo, protecting my own hide, and not rocking the boat are sadly philosophies that have become fixed thought patterns at many companies.

  8. Jennifer Baljko
    November 2, 2010

    Hi Backorder
    Since history has a knack for repeating itself, a super-computer modeling system could be a useful starting point. Would be an interesting reminder to see how much the industry has weathered in just a generation. We can layer on top of that expected cell phone growth in developing regions; anticipated iPad/Kindle, electric car, and alternative energy demand; carbon footprint calculations; electronic device take-back recycling costs, and expedited shipping expenses. Can you image what printout would look like?!? How might we interpret all the data and do something useful with it?

    Maybe the answers really are written in the stars =).

  9. Ariella
    November 2, 2010

    Jennifer, you pinpointed exactly what often squelches true innovation: “actual failure or the fear of failure comes at too high a price. . . . many executives and the power structures that support them may not prefer to have the rank-and-file throwing all sorts of ideas into the mix. Keeping the status quo, protecting my own hide, and not rocking the boat are sadly philosophies that have become fixed thought patterns at many companies.”

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