Many people think of an innovation as a new product, but it can also be a new way of doing something or a new way of thinking. Innovation is usually associated with business and technology, but it happens in any field where people introduce change.
The topic of innovation has echoed loudly in supply chain circles, and for good reason. Sparks of innovation are igniting conversations about some of the most important and game-changing topics in supply chain. At Kinaxis, we've had the chance to join some of these conversations.
During Kinexions ’23, Kinaxis’ supply chain innovator’s conference held in Nashville, we drew upon the spirit of that city’s music roots to host novel ‘Jam Sessions’ with a ‘mix’ of perspectives around themes like sustainability, AI, and innovation. Thought leaders, customers and other luminaries connected to elevate the supply chain conversation. Kinexions also featured a panel discussion on innovation where panelists from academia and industry discussed business being at an inflection point – a crossroads where innovation can foster a better way for people and the planet, and why a lack of innovation can have devastating consequences. Lastly, innovation is a frequent topic of discussion among the passionate thought leaders who join Kinaxis’ Big Ideas in Supply Chain podcasts.
Something special happens when you bring together people from diverse backgrounds to share perspectives on a topic that is getting global attention and how it impacts their supply chain organizations and companies. So, pull up a seat at the proverbial table. These folks had some interesting things to say!
Innovation in the context of the supply chain
Changing consumer behavior has been a key driver of supply chain innovation over the last 10-15 years. Take the iPhone for example. The introduction of new models increases demand for a product with large SKU counts, varying delivery techniques, and shrinking delivery windows. These new products and shifting consumer behavior force changes to the supply chain and drive the need for new perspective. Gone are the days of looking at the supply chain as a cost center. It is increasingly viewed as a source of innovation that gives companies an opportunity to explore new initiatives and embrace change.
A common challenge for many companies embracing change is the misalignment between technology and process. Technology constantly evolves while processes are often slower to change. In this way, innovation can be a disruptor. It’s important to stop and think about why change is needed, consider your baseline and innovate from there.
If you’re stuck in the past and embarking on change to drive innovation, remember: Change goes beyond implementing innovative technology like artificial intelligence or machine learning. You must also consider processes and people and understand the value for each.
When it comes to processes, technology, and people, introducing innovation can usher in challenges that may have you saying, “easier said than done.” It’s a struggle to put innovation into a roadmap; to link the critical components, connect the value, and manage risk. Without giving each step in the process careful consideration, you can quickly derail and end up in an “everywhere, all at once” situation.
So how can supply chain leaders spark innovation that propels their organizations forward? The answer lies in the human component of change.
While innovation can be exciting, for many it is overwhelming. Without clear details, it can be hard for people to see the vision for innovation and conceptualize how to get from Point A to Point B. A Center of Excellence is one way to discuss the problems at hand and figure out the solution.
Capitalize on the excitement and socialize the many benefits that come with innovation. Instead of pushing change, leverage the strength of different stakeholders to get buy-in and create ownership in the process. Hackathons are a great way to spur innovation and generate bottom-up enthusiasm and ownership. One caution – while hackathons can generate many great ideas, it’s impossible to implement them all, which can lead to an inadvertent drop in morale.
Eaton, a global power management company, has a culture that fosters supply chain innovation. In a recent Big Ideas in Supply Chain podcast, Rogerio Branco, Executive Vice President and Chief Supply Chain Officer talked about how Eaton encourages the sharing of innovative ideas. “Everyone has ideas. How can we channel these ideas? We came up with the concept of an incubation lab where people can share ideas. There, they are captured, evaluated, tested and measured.”
Ideas in Eaton’s lab range from business process improvements to cutting-edge technology breakthroughs. This ideation process has resulted in patents and Eaton is exploring how to commercialize these innovations to propel the company forward.
Start with the biggest problems and celebrate wins. A solid change management process with strong leadership and alignment across the organization enables you to maintain focus. Embrace education along the way and evangelize the importance and impact of change. Identify milestones, small wins, and opportunities to address needs as you go and don’t forget to celebrate victories.
Target your communication for best results. In addition to regular updates (silence doesn’t instill confidence), be sure to consider what information matters most to everyone. Adjust your messaging and communication strategies to resonate with various stakeholders within the organization.
Collaborate across the organization. Innovation creates a great opportunity to interface with other groups in the organization. One Jam Session participant shared how they built a strategic supply chain team that drove innovation. They defined tools and processes and shared them with business units that owned the plans. Innovation took root as these teams embraced technology and modules to drive transformation.
Streamlining systems through innovation
There’s been many conversations about how innovation enables connectivity within the organization. Most organizations have several manufacturing and distribution sites each with its own systems – some being 15-20 years old. Innovation provides an opportunity to connect these disparate sites and systems to harmonize the supply chain to unlock new value and create efficiencies.
Innovation lays the foundation for tomorrow’s supply chain
The pandemic forced companies to reflect on how broken processes and tools can’t meet the needs of the constantly changing supply chain landscape. As we look to the future knowing that the next big disruption or swing in customer behavior could be just around the corner, supply chain practitioners can embrace innovation to build more agile and resilient supply chains.
The boardroom now sees the supply chain as a strategic weapon. When we have perspective as a supply chain community, we understand that the constant obstacles thrown our way breed new opportunities for innovation. Companies that embrace innovation and weave it throughout their supply chains will gain a competitive advantage and thrive through the next disruption.