July 2010 | Commentary | 3PL Line

10 Paths to Supply Chain Innovation

Tags: Supply Chain Management

Jim Butts is senior vice president, C.H. Robinson Worldwide, 952-937-6788.

Leaders ask, “How can businesses be more innovative?” But successful innovation is rare. It requires hard work and creative thinking, and its value as an activity is often viewed skeptically. To move your business along the road to supply chain improvement, take a journey down the following paths to innovation.

  1. Borrowing. Many of the past decade’s great innovations have not been applied within your industry. Find a practice that works in the financial sector, for example, but hasn’t been applied in supply chain management, and you are likely able to capitalize.
  2. Variation. Take a concept such as “self-serve” operations and apply it to your business. What are you doing for customers that they could do for themselves? Also consider whether there are things that customers could be incented to do, or things you do currently, that customers might do for you.
  3. Reversal. Outline a current process, then reverse it. Vendor-managed inventory is a classic example. It was once a retailer’s responsibility to manage inventory; now vendors do it.
  4. “What if?” Ask what would happen if you had to design a new way of serving your customers. Or what if you did not have your current infrastructure? The answers to these questions might surprise you— and might lead to some of your best innovations yet.
  5. The best possible. Imagine the most ideal situations for your business. How would the best possible team perform? How could you establish the best supply chain?
  6. Starting over. If you were redesigning your product or service, what changes would you make? Would those changes affect your personnel? Would they alter your competition? Would they change your customer base, locations, or resources?
  7. Double your resources. What if you could spend twice as much? Where would those dollars go? What would you do, and get in return? This approach identifies those things you would do if you could, but often don’t.
  8. Halve your resources. Allocation decisions define priorities. Budgeting is not an exact science, however, and this exercise defines needs versus “nice-to-haves.” This process will identify preconceived notions, erroneous assumptions, blind spots, and protectionism.
  9. What would ___________ do? Use a subject matter expert whose philosophy or approach is well-known. What would Warren Buffet do with your portfolio? What would he do with your company? What would Bill Gates do with your IT department?
  10. Trading places. The success of effective people is generally not limited to specific situations; they develop ways to become effective in their circumstances. Skillful “trading places” allows you to practice adapting to situations. What would you do if you ran Berkshire-Hathaway? How would Microsoft be different under Buffet? This exercise involves identifying leaders’ principles, knowledge, traits, and abilities.

more than improvement

Supply chains have dynamic natures, multiple moving parts, and situational variables; they are ripe for innovation. Many firms hope continuous improvement will achieve supply chain goals.

Continuous improvement, however, often will not establish competitive advantage. Rather, it may keep apace with the rest of the field. Leaders demonstrate that the surest path to competitive advantage is through innovation.