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CSCMP Hot Topics… explores supply chain innovation
Too often, an initially successful supply chain innovation fails to reach its full potential. In some cases, an effort that delivered fantastic results early on fades away over time. In other cases, successful improvements launched in one location fail to take hold in other sites across the network or enterprise. To find out how companies can extend the benefits of innovation, CSCMP commissioned a research study examining Supply Chain Innovation Award (SCIA) finalists over the past 10 years. The latest issue of CSCMP Hot Topics… discusses these findings and what supply chain professionals can learn from them.
The researchers' 2014 analysis of 74 finalist cases, together with retrospective interviews with 33 of the finalists, determined that leading supply chain innovators excel in certain capabilities, such as finding opportunities, making the case for innovations, designing and implementing innovations, and sustaining and expanding them.
The researchers found significant variances in the degree to which finalists sustained or expanded innovations. At the time of the analysis, a majority of innovations (76 percent) had been continued but were essentially unchanged from the original designs. Only 15 percent of the innovations led to new applications or new business opportunities. The remaining innovations (9 percent) had been discontinued. These results raised an interesting question: Why are some supply chain innovators more successful than others in sustaining and building upon their innovations over time?
One reason is that innovations are more sustainable if objectives are closely tied to strategy. Those who were able to sustain and grow their innovations attributed some of their success to the link between the target of the innovation and the strategies driving both the supply chain and the company.
To follow these prescriptions and become better at sustaining and expanding supply chain innovations, most supply chain organizations will likely need to modify their incentives, resources, and culture, especially in regard to how innovations are viewed. If an innovation is seen simply as a means to an end, it probably will wither over time, even after initial successes. Instead, each innovation needs to be seen as a way for the organization to learn and grow, and as a way to simultaneously solve current problems and create new opportunities in the future. Managers who view supply chain innovations this way, the research found, are more likely to take the necessary steps to sustain and expand the project and its benefits.
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