Looking at supply chain innovation over the past 10 years reveals a lot of small changes applied very effectively, resulting in a significant cumulative impact, says Golicic.
Rather than a big, disruptive technology, which many people associate with innovation, changes in the supply chain for the most part have been in processes, new applications for existing technology or improvements in business relationships, Golicic says. “These are situations where supply chain managers realize something is just not working or not providing the results they need, so they decide to implement a different process or make better use of applications. This type of innovation is more incremental, but still is new to the company implementing it,” she says.
Golicic and her team responded to a call for research on the state of supply chain innovation from the Council of Supply Chain Management Professionals, which sponsored the project.
In addition to addressing specific performance issues, another driver of supply chain innovation is the latest trend or “burning platform,” Golicic says. “Data analytics is a really hot topic in supply chains right now and is spurring a lot of innovation internally.”
Many innovations are driven by the push to reduce costs, but companies sometimes find that applying innovation to cost reduction can have other benefits, such as cutting emissions or reducing carbon footprints, Golicic says. Another unanticipated benefit may be more satisfied customers and an influx of new business. “Companies typically innovate to improve their performance, and then they find that suddenly their customers are happier and that new customers are coming on board,” she says. Companies don’t necessarily measure these byproducts, but “they are getting a big return for what they invest in innovation.”
The two most important keys to successful innovation are having top management support and sufficient resources to follow through, the research reveals. Conversely, the biggest barrier to success is not having that top management support. “If you don’t have it, you are not going to get the time or the resources to pursue what you need to do,” says Golicic. “Innovation, even if incremental, requires a lot of change management.”
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