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Winner: TransCelerate Comparator Network
Finalists: Whirlpool, Kenco, Vodafone, Intel
Supply chain practitioners are used to seeing competing companies come together to share expenses on non-core competencies, such as co-loading products or using the same distribution center operation. Saving money by moving somebody else’s widgets with yours just makes sense; nobody gives any trade secrets away by using the same 3PL. Fulfilling orders from the same DC as your chief rival doesn’t mean giving away the store.
Helping a competitor’s research and development efforts to come up with a product that will vie with yours – that’s a bit different. No wonder there was internal pushback in 2012 when some folks in the pharmaceutical business decided it made sense to enable rivals to test medicines they hoped to bring to market against those already successfully making money.
So an industry forum called TransCelerate BioPharma Inc., this year’s winner of the Supply Chain Innovation Award, did some pushing of its own when it formed the TransCelerate Comparator Network to bring efficiency, quality assurance and cost reduction to the process of developing new medicines.
When pharma companies could buy a medicine directly from a competing manufacturer, no longer would they have to purchase from wholesalers whose supply chains couldn’t ensure sufficient supply or quality yet guaranteed higher costs.
It’s hardly news that medicines often are quite expensive, and any initiatives that can mitigate development costs are welcome by patients. That’s especially true for those who await new medicines to treat conditions for which available products have not been ideal.
Argos, this year’s innovation award runner-up, is no stranger to the internet and to e-commerce. Indeed, more than half of the total sales of the big U.K. retailer are sourced online. And it was the first U.K. company to generate £1bn ($1.3bn) in sales through mobile devices. But the nature of the retailer’s fulfillment network didn’t lend itself to the demands of modern-day e-commerce. So, it shed its roots as a catalog operation and created a new hub-and-spoke fulfillment model for online orders, drawing on its extensive network of stores.
Understandably, big-volume, money-making markets get a lot of attention from manufacturers; niche markets less so. But Whirlpool knew there was money to be made there as well. However, its high-velocity distribution model, in which models that didn’t meet certain sales thresholds were not being stocked at regional distribution centers, was a problem. Realizing that one size doesn’t fit all, Whirlpool remedied the situation in an innovative way.
Sealed Air Corp. had a serious problem with customer-imposed fines for such things as missed delivery targets, improper labeling, incorrect numerical identification of product, pricing errors and shipment shortages. It knew it wasn’t always at fault, but how to prove it? It partnered with Kenco Logistics Services, which developed an app to manage the huge volume of photos taken to prove compliance with customer requirements.
Telecommunications giant Vodafone realized it had to transform its supply chain to remain a world-class operation. To do that, it used a data analytics technology to uncover hidden inefficiencies, automate and streamline supply chain processes. The results: Vodafone cut process costs by 11 percent (reducing the cost per purchase order from $3.22 to $2.85), reduced time to market by 20 percent and achieved 100 percent process transparency in less than six months.
As the size of the PC market has declined, Intel has adopted what it calls the virtuous cycle of growth. In this strategy, sales of such things as PCs, autonomous vehicles, industrial robots, and self-flying drones drive additional compute loads on the cloud and data center. The cycle drives Intel’s supply chain characteristics, which meant the manufacturer had to innovatively blend internal and external outsource manufacturing supply chains.
Whether developed internally or by trusted partners, the innovations described above helped this year’s finalists immensely. Congratulations to the leadership teams of each company for their foresight and willingness to try something new.
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