Welcome to the session on supply chain innovation. In this session, we will look at some examples of supply chain innovation, and also what are the underlying drivers of supply chain innovation. Supply chain innovation really is about all kinds of changes in the way you work, the way the supply chain is structured, your processes, your competencies in the supply chain, really to make things work better, or even to do completely new things– new really innovative things. All of these kind of innovation typically require extensive use of ICT, extensive change of your processes, business models, competencies of your people, and also they require collaboration with your supply chain partners.
Let’s look at some examples. For example, the doll industry, where we have some companies that for a long time were very successful in producing all kinds of standard dolls modelled after popular movie stars, popular cartoon figures, and so on. This model has worked for many decades, but recently we see that it’s challenged, facilitated by new types of supply chains, new technologies. Here, for example, you see that a company called Minime introduced a complete customised way to build your own doll. You can upload your photograph, and then they have artists working in studios around the world to build a statue based on that photograph.
More recently, you see a company called Twinkind– and several others– that engineer a complete customised doll modelled after a 3D scan made of your body. So you can go to a 3D scanning studio, have a very precise scan made, and then you get your completely customised statue of your own self. Again, you see these are very new models that can only happen because of very extensive technology innovation. And the supply chain is structured in these examples completely different than in the past, from make-to-order to engineered-to-order, and from just having mass stocks of standardised products to having no stocks at all of the end product. Similar example you could see in other industries, like in the furniture industry.
We used to go to a furniture shop, look at furniture. If we like a shelf or a desk, we would buy it, and then probably wait for many, many weeks before it was delivered to our house. Or if the store would have large stocks, then we could immediately buy it. But the stock would really have high risks in having all this furniture in stock. New models, they have this global standardisation, the same products all over the world, big warehouses where you can go and buy your furniture at very competitive prices. But these stores typically lacked the variety, the customisation that you would really like. More recently, we saw e-commerce models that match supply and demand.
But also more recently– and maybe more interestingly– we see products that can be mass customised by downloading software and designing your own furniture. And then you directly instruct the production robotics production floor to build the furniture for you. We also see 3D printing coming into this space. So you design, maybe together with a furniture designer, your unique furniture. And it’ll be 3D printed for you. Again, all these models have big innovations and big change in working for the supply chain As a third example, you can look at the food industry. We used to go to the supermarket, and we still go to supermarkets. Supermarkets have some big challenges.
Large product variety, big challenge to manage the stock, to manage fresh products. We see innovations, also e-commerce entering this market, where you order online, and it will be delivered to your home. But more recently, these models have become much more advanced. So you see mobile apps that help you to buy certain recipes completely tailored to your taste. We see home deliveries where boxes of food are produced for a large group of customers, and contain exactly what you need for the family for a week. These models have again a big impact on the current supply chain. They reduce all these challenges of managing stock, managing deliveries to the stores, managing the shelves in the stores.
And they really make it much more manageable to reduce waste, and to service the customer, and compile the meals in a way that really are fit to a family situation. Also here we see 3D printing. 3D printing your own food, maybe a bit further in the future. But if that’s going to happen, again the supply chain will change a lot. So all these examples– and you can find similar examples in almost every industry– show that technology and business models innovations go hand-in-hand, and really enable completely new ways of working that ask for a new way of organising the supply chain, new way of collaboration between the partners, and also new competencies in the supply chain.
This is all part of continuous supply chain innovation. And next we will look into some of the underlying drivers for these innovations.