SPEAKER: In this session, we will look into how you can make supply chain innovation happen. Remember that supply chains are all about collaboration. They are all about the communication and information flows between partners that together make up the supply chain. And if you want to innovate or make things better, do things better, more productive– do new things. Then, you have to work together with your partners. You have to change the structure, the competencies, the way you work, the technology you use– the information you share. So supply chain innovation is really something you cannot do as a single company. You have to work together.
Supply chain innovation is really about small changes as well as big drastic, dramatic changes, also called “radical innovation.” Both are called “innovation” and you have to do all of these types of innovation to stay competitive and innovative. So it’s really a matter of continuously spotting for new ways to improve, new technologies, new practises that you can benefit from. Usually, it’s the interplay of these three things, the way you structure your supply chain, the network structure, the technology that you use– and of course, very often, it’s ICT software, hardware technologies that you have in use– and the processes and the way they are organised. And you continuously look at them and try to improve them. Analyse them.
Look for new opportunities to make things better and to do new things. We see that very often, successful changes are started by pioneers, groups of companies that sit together, analyse opportunities for improvement and innovation, and then work together to make things work better. For example, they can look at certain inefficiencies in the supply chain, for example, stock levels along the supply chain and why they are high and why there is a lot of redundant stock. They can analyse it together and then they can come up with a new process to eliminate this waste and these inefficiencies.
They can do that, for example, through a new process, a joint planning process combined with new systems that monitor actual stock levels and that analyse them and a new business model that also determines random benefits and the cost of this investment of this new supply chain innovation. Go. There are many of these kind of examples and here, you see a list of typical examples of supply chain innovation, where you see that a process changes with help of technology and with help of a joint innovation. These examples were compiled from a number of case studies that were successful supply chain innovations. ICT is a huge driver of supply chain innovation.
Many technologies can help you to look at the current process, analyse it, and see how it can be done better. Technologies can help you to monitor the current status, to analyse the way things work today, and also to model and simulate and analyse new ways of working and then implement them. And also in implementing them, new systems, new technologies can help you. We will look into these systems later in this course in more detail, but you see typical technologies help you to monitor or to interchange information and to use planning and optimisation software to make it happen. Again, it’s important that you don’t see these technologies as technologies that you can implement yourself in your company.
They will only bring benefits if you implement it as a supply chain or even better, as an industry sector. How can you make innovation happen? There’s no golden formula for this and it’s a whole field of study by itself. But let’s just highlight a few ideas that we see working in supply chain innovation today. It’s very important, as supply chains are usually run for decades in the same way, that the supply chain opens up for external ideas, external parties. Collaboration not just with the traditional partners but also with other partners can help a lot to make supply chain happen.
Sometimes, the “golden triangle” is used, which is the government, the knowledge institutes, and the industry itself, to work together on innovation. And this is very often a success because they each provide the unique perspective on supply chain innovation. Also, we agree that a multidisciplinary approach is really important. So it’s not just technology people or the operations or supply chain experts or the sales people that can make this happen by themselves. You need a lot of disciplines because supply chain management is an interdisciplinary study. And you need to look at supplies innovation from multiple perspectives, regulatory perspective, technologies perspective, the customer market perspective, and so on to see if innovation can make sense and can happen and can work.
So really, it’s an interdisciplinary team that has to work on these supply chain innovations. A way to make supply chain happen– it can happen in your own company. Then, you have to create an entrepreneurial culture in the company. So allow people to experiment, to do new things, to test new ways, to play with new technology, to give also them incentives to try out new ways of working to come up with new ideas. Another way is that you help maybe together with other companies, with government, with universities, to create spinoffs, companies that spin out from university, from industry, sometimes bundled together on a science park that really work together on logistics and supply chain innovations.
Also, in the research world, there’s a lot of attention for this, how to make innovation happen– so how to bring all these new ideas from research labs and from universities to the practise. And there are now many ways of doing this, like enabling researchers to work with companies much closer, allow companies to also set up research facilities at the university, have certain research methods and very close collaboration with industry like action-design research, where the researchers really help the actual supply chains to adopt new ideas and new technologies and study them in the real-world setting. All these ideas work really in making supply chains innovative.
From our own experience, we tried a lot of things to work with the industry to make supply chain innovations happen. We really don’t want innovations to stay in the lab. We really want them out there and I hope that you also through this course get many ideas on how you can innovate and improve supply chains. You can maybe benefit from– of course, you’re doing this already now– learning about innovations, training, learning. There’s a lot of material on the web and you can learn also from courses, from trainings, of all kinds of new practises. You can also be active in organising sessions, multidisciplinary sessions where you have really brainstorms about better ways of organising your supply chain.
For example, we organised a session together with the sector boards of the food industry together with the retailers and the logistics service companies to sit together a day and really dive into how they could make their joint supply chain work better, facilitated by all kind of group support technology, brainstorming technology. A lot of ideas were generated in a day on how they could work together much better. Something we also established is a design lab. The design lab really is multidisciplinary by nature and you can sit there in a very open environment with a lot of technology to collaborate on new ideas.
And there, it’s a really popular method to bring together researchers, practitioners, experts, consultants, and let them work on a certain supply chain problem and come up with innovation in a very short period of time. In virtual reality labs, you can create very accurate models of the actual current state of a supply chain using simulations, using games. And then, you can brainstorm, facilitated by these models and facilitated by all kinds of software, to come up with new ideas. Another model we tried now for the third time this year is a supply chain hackathon.
So we combined companies with data and issues they may have in the supply chain with groups of young professionals and students that like to work on these kind of problems. It brings a very novel and open perspective to the problems that supply chains may have. And you see this phenomenon of hackathons is becoming really big in the world as organisations are realising that this is a good way to have very fast innovation and very fresh knowledge and fresh ideas pulled to their business. Also, companies are putting up challenges online. So they just give awards to people who have good ideas to help them solve their problem.
In this way, you can organise a global pool of talent to work on your challenges. And if you facilitate people with data and you facilitate with information about your supply chain and your challenges, you can really get them involved and help them think about how you can become better, smarter, and more innovative. Simulations and gaming we really believe is a very powerful way to get people to think about new ways of working. So in many projects, we have built games based on simulation models of the supply chain and then stimulate alternative ways of working and see if the supply chain actors are really getting enthusiastic about this kind of working.
Many stakeholders in the supply chain also realise that they have to open up their facilities for smaller companies.
They are often very much faster in innovating and bring in new ways of working and new products to the market. So they start their own campus and they give facilities and help the young start-up companies to work close to the big mother companies or institutes and come up and try new ideas. This is, again, a really successful way to get really rapid innovation and still benefit from it if you are a company that is, let’s say, busy operating large global supply chains.