Innovation imperative. Risks in supply chains. Mitigate with caution (and actionable intelligence)
Despite all the doom and gloom in the economy, the mood in this year’s AMR Research Executive Conference was notably upbeat. And so was the message around innovation. Former Disney boss Michael Eisner’s “creativity in a box” expression summed up the prescription for this economy: organizations need to think about creative combination of physical products, content and IP to survive and thrive in this new economy.
What should companies do to have their supply chains lead the way and become a source of competitive advantage?
There are three characteristics that make the leaders tick:
- Mastery of content based supply chain: what Apple has done with App Store and iTunes, or how Nokia is connecting with its customers thru N-Gage and the Ovi platform, or how Nike is embedding their brand and design within the physical product.
- Continuous innovation.
- Understanding the role of data in their supply chain and making it completely demand driven. One interesting data point mentioned was that it takes three times more to sense demand than respond to demand. Most organizations plan their operations on market order and given the complexity of today’s supply chain that is far from the real demand.
Another aspect that differentiates the leaders from the rest is their anticipation and preparedness for risk, and the ability to act on it. As if the economy and market aren’t enough, there are other risks to mitigate while getting creative products to market? Latest research suggested that supply failure, commodity price volatility and product quality failures are some of the top risks for global supply chains. The mitigation strategies for these risks are not that complex, it’s the ability to detect some of these early warnings and dynamically tweak the supply chain that separates the best from the rest. It doesn’t mean, however, that we’re back to multi-million dollar complex systems and multi-year implementations to instrument, acquire and report on vast amount of data that resides within the supply network. There is enough maturity and commoditization in the technology space that one doesn’t have to spend enormous amount of money for a solution to get better visibility across the supply chain and have the capability to act on it. The key is identifying the right set of metrics to monitor, making sure that the quality of data supporting those metrics is good, and providing some feedback loop to act on the outcomes to impact supply chain performance. This can be done iteratively by simply starting with a few select metrics.
To learn more about how to get started, register for the webcast hosted by AMR Research: “'Enable the Agile Supply Chain - Unlock Value with Actionable Insights and Collaborative Execution”
For more information on ‘next generation supply chains’, go to nextgenerationsupplychains.com
Listen to my discussion with VJ Bala, Head of Manufacturing Marketing at Infosys
