The Key to Lasting Supply Chain Innovation: Get Real

Tags: Logistics I.T., Software-as-a-Service (SaaS), Logistics, Technology , Big Data

Jeff Shorts, Chief Information Officer, Neovia Logistics, 469-804-2483

Managing a business for sustained growth often means finding and implementing innovative solutions to the challenges of complex supply chain logistics.

Yet, when it comes to achieving lasting, repeatable innovation, it’s the real-world solutions that win out time and time again in leading logistics facilities.

In his book Moneyball, Michael Lewis detailed how an analytical, evidence-based approach to baseball helped the Oakland Athletics overcome an uneven economic playing field. These same principles can be applied to logistics and supply chain management, where an outcome-driven philosophy based on data and analytics can help drive success.

While flashy innovation grabs headlines, even the most technology-savvy business leaders know to look beyond the hype to find practical yet transformational innovations that deliver bottom-line results.

Third-party logistics providers are often asked to reliably deliver these results with three simple promises:

  • Get the right product to the right destination quickly and efficiently.
  • Improve productivity in the warehouse.
  • Eliminate waste and unnecessary costs.

Today’s most progressive companies are looking to a few critical trends for real-world innovations that address these issues.

Virtualization

Cloud computing has evolved from a popular buzzword to a viable, and even necessary, tool for capturing and analyzing business data in real-time. Today, logistics firms are offering their own cloud-based technologies to give customers better visibility into their data and use it to make smarter, more informed decisions.

Cloud-based internal solutions, coupled with best-of-breed Software-as-a-Service (SaaS) solutions provided by third-party vendors, offer a variety of cost-effective options for managing business activities. Web-based tools have become commonplace, and with the emergence of smart phones and tablets, data is at your fingertips from anywhere in the world.

This results-oriented approach, increased security, transparency, and access into their processes are enabling logistics providers to help companies extract value from their data and find dramatic efficiencies that may have been hidden just a few years ago.

Purpose-Driven Automation

Innovations in process automation can come in many forms. But the best process automation innovations deliver immediate returns as well as long-term value.

One of the most effective innovations is using analytics to turn data into actionable process improvements. Complex data-mining software, such as warehouse planning simulators, can help supervisors manage workflows, optimize inventory turns, make smarter stocking and delivery decisions, and improve operational efficiency in ways that have a tangible effect on the bottom line.

For example, a global auto manufacturer approached us about reconfiguring its North American parts distribution. After years of continuous improvement activities and fine-tuning, they recognized they could increase value through comprehensive optimization. By harnessing the data generated from a study, which combined network and facility planning with inventory simulation, they reduced North American inventory value by 39 percent while boosting availability by nearly 19 percent.

The Value of Human Capital

It’s true that innovation can improve productivity, but good old human ingenuity is the best way to drive solutions. Companies have a wealth of intellectual property and institutional knowledge that can increase productivity and value. Far too often, the experience of team members is overlooked and underutilized, leaving simple optimization opportunities on the table.

In the logistics business, employees who live the daily routine can be your best source of innovation. By tapping into their knowledge and energy, they can provide more value to the team. Some ways to do so might include:

  • Building a strong employee feedback process
  • Setting a tone of continuous quality improvement
  • Offering career development options

Conclusion

Truly transformational real-world innovation delivers business value, not just bold headlines. Real-world innovation is an organizational philosophy, focused on solving problems with real-world solutions and valuing substance over flash. Properly utilizing the tools, people, and experience across the business creates purpose-driven innovation that enables smarter, more informed decisions and offers a significant return to your business.