APQC recently spoke with Dr. Morgan Swink, Executive Director of the Supply and Value Chain Center at Texas Christian University (TCU), about his research on supply chain innovation and his work with CSCMP’s Supply Chain Innovation Award.
Dr. Swink gave an in-depth presentation on his research findings during a recent APQC webinar.
Why is this research important to you and other supply chain professionals?
In the increasingly volatile business environment, supply chains need to reorganize frequently, constantly integrate new information and process technologies, etc. The ability to adapt and innovate is the basis for competitive advantage, especially in fast moving industries.
When starting a supply chain innovation effort, where should an organization look for ideas on how to proceed?
The best, most innovative ideas usually come from outside the organization, because internal folks tend to be locked into the status quo. So it’s important to build and maintain networks for ideation with innovative suppliers, customers, consultants and other partners, universities, and peers in trade organizations like APQC!
Once an organization has an innovative idea, how should it vet that idea to know if it’s a worthwhile innovation?
It needs a top-down and bottom-up process in which all key stakeholders are represented. It is important not to get fixated on financial returns only, but to consider fit with strategy and especially “option value.” That is, what the organization will learn by pursuing the innovation, even if it is a “failure” in the short term. What new opportunities might become available as a result?
When prioritizing steps in the innovation process what is the key to remaining focused on the problem (and not your perception of the problem/opportunity)?
Customer/client/user centricity is important. The organization needs to have someone leading the project who has intimate customer knowledge. Don’t leave design or implementation to “technocrats.”
In your research, have you noticed any industries that have been doing more to innovate their supply chains?
Past award winners and finalists for CSCMP’s Supply Chain Innovation Award represent a wide array of industries, but many seem to come from retail, CPG, and electronics. There have also been some interesting ones in health care networks (including hospitals as well as distributors).
In your experience, what is one factor you have seen repeatedly that prevents improvements and innovations in the supply chain?
Fear, or “risk aversion.” Real innovation always involves taking a risk, and supply chain folks are trained and motivated to value stability, consistency, and predictability. It often takes a crisis or burning platform in order to get folks to overcome their risk aversion.
Is there one common thing that successful supply chain innovation plans have that might not be so obvious?
The thing that is unique about supply chain innovation as opposed to innovation in general is that it almost always involves partners. Some managers and organizations are better at taking the long view in managing these partnerships. Some have greater capability in managing collaborations, and this is a multifaceted ability that is influenced by culture, experience, technology, etc. It is a difficult capability to intentionally grow. Consequently, it is a powerful basis for competitive advantage through innovation.
You can learn more about Dr. Swink's research by viewing APQC's February 2015 SCM Webinar recording and slides.