CSCMP's Supply Chain Quarterly
December 19, 2018
Forward Thinking

Modex keynote provides a how-to guide to "disrupting yourself"

UPS CIO Juan Perez challenges Modex attendees to create a culture of—and structure for—innovation within their company.
Juan Perez of UPS at Modex 2018
How are you disrupting yourself?" UPS' Juan Perez asked Modex attendees.

There's been a lot of ink spilled and words uttered about "disruption"—whether it's disruptive technologies (like the Internet) that can upend companies' existing ways of operating, or disruptive competitors (like Amazon) that come out of nowhere to change the face of a market.

Today, at Modex 2018, MHI's expo for the manufacturing and supply chain industry, Juan Perez, chief information and engineering officer at transportation giant UPS, challenged attendees to seize the initiative and not wait for disruption to come to them.

"How are you disrupting yourself?" he asked the audience during the opening keynote presentation, "Anticipating Tomorrow's Supply Chain Challenges—Today."

In other words, companies need to spend time thinking about how they could create innovations that could completely change their own business. As an illustration, Perez talked about UPS's own innovation journey. "Just a few years back, we were a small-package delivery company," said Perez, "but we realized we couldn't just be in that business. We had to disrupt ourselves."

UPS has since expanded into freight forwarding and a number of other facets of logistics management. At the same time, it has been fostering innovation with such technologies as its On-Road Integrated Optimization and Navigation (ORION) system, which uses advanced analytics to plan and optimize delivery routes. It is also working with partners on the forefront of technology in such areas as artificial intelligence, blockchain, autonomous vehicles, robotics, virtual reality, and the Internet of Things.

"We now think of UPS as a technology company," Perez explained. And it's not just UPS that's in that position, he said. "No matter what business you are in, you are working in a technology company, especially in the supply chain today," he said.

Perez identified what UPS saw as the three innovation initiators for its market space:

  • Enhanced mobility: UPS implemented its first mobile device in 1989, which was used by drivers to record package deliveries. Since then, handheld devices have revolutionized how drivers and consumers operate and interact with the business.
  • Empowered consumers: According to Perez, it's no longer sufficient for UPS to deliver packages to regular addresses. Consumers now demand more choice, control, and convenience when it comes to the delivery experience. UPS is working to meet this need by providing consumers with more physical access points, such as lockers, and more visibility through apps such as My Choice.
  • Evolving technologies: With partners such as Cyphy Works, Workhorse, and Zipline, the company is exploring drone delivery and electric delivery trucks.

It may seem counterintuitive, but according to Perez, the key to responding to these initiators is to have a disciplined approach to innovation. Companies need to have a culture of innovation and a structure for sharing ideas, standard operating procedures for actually implementing innovations, and an appropriate reward system, he said.

Susan Lacefield is Executive Editor of CSCMP’s Supply Chain Quarterly.

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