While innovation is standard operating procedure for tech giants like Apple and Amazon it’s often challenging for companies in more “traditional” sectors. However, embracing innovation is just as important for these companies. Those who don’t innovate will be left behind.
Look around. Innovation is everywhere. It’s easy to see how innovation has made a meaningful impact on our lives. From mobile phones to electric vehicles and the way we listen to music – all of it has changed arguably for the better, thanks to innovation.
While innovation has changed the products we use and drives new, more personalized customer service models, innovation in the supply chain has happened behind the scenes. And while they aren’t front and center in our daily lives, big things are happening in the supply chain to drive new levels of speed and efficiency. New technology solutions tapping into the powers of artificial intelligence and machine learning are evolving how supply chain professionals handle disruptions and changing customer demands, creating efficiencies and expanding end-to-end transparency. There’s never been a better time to take advantage of the opportunity that comes with infusing new tools, processes and thinking into your supply chain.
So how do you bring innovation to life in your organization and optimize the supply chain to be ready for whatever the future holds? That was the center of a discussion between Professor Mohan Sodhi from the Bayes Business School at the City University of London, Professor Jay Swaminathan from the Kenan-Flagler Business School at University of North California, supply chain innovator, Angel Mendez and Kinaxis Chief Strategy Officer, Dr. Anne Robinson during a recent Big Ideas in Supply Chain podcast.
Here are a few highlights:
Dig into the data
Artificial intelligence has been a game-changer. Historically, supply chain data was sourced from ERP systems, but now a new generation of data like blockchain for example, is coming from IoT. Now supply chain practitioners can harness data from these sources and analyze it in the right way. That’s where innovation comes into play. Think differently about how you capture data and combine human intelligence with artificial intelligence and concurrent planning to intelligently control the digital supply chain.
Mohan expanded the conversation to talk about data speeding decision-making. “Latency for information flow should be zero seconds. Currently it’s not. So, by making it zero seconds, you’re making the supply chain decision-making much faster.”
Changing consumer habits are forcing companies to do things differently. Customers are buying and consuming products in different ways and forcing innovation. Yesterday’s supply chain management techniques aren’t nimble enough to meet the demands of today’s customer.
To remain competitive, companies need to recognize customer needs and how they have evolved. Instead of looking at the supply chain as raw material forward, see it as customer-backed. In a world where the customer is king, uncovering new innovative ways to delight your customers with exceptional service will keep them coming back.
Innovation has changed manufacturing. Some product components that were once essential parts of a finished product have been replaced by digitization. Take for example an electric vehicle. Components for everything from airbags to air conditioning and vehicle stabilization systems have been replaced with software and chips. This necessitates flexibility in sourcing different parts, and an end-to-end connected supply chain.
If you want to successfully adopt innovation in your supply chain, you must be open to trying new things. Be curious, learn, test and try, and then fail fast. While failure is unavoidable, ultimately an innovation will emerge that will change the trajectory of the business.
Jay suggested an actionable way to integrate innovation into the organization. “Use a pilot project to show how an innovation will enhance the value your business provides. Many times, people hear a buzzword like blockchain or AI and think they need to implement it, but doing a pilot can help you think about the value.”
While the last few years have forced big changes for the supply chain, the years ahead present new possibilities as supply chain professionals embrace innovation.
Watch the entire conversation here:
For more insights from industry experts on various aspects of supply chain management, be sure to visit Big Ideas in Supply Chain.