Supply Chain leaders view innovation as critical and achievable

October 12, 20173 minute read

AWESOME leaders explored supply chain innovation from many angles at the Mega Session powered by AWESOME at the 2017 CSCMP Edge conference. They gave insights on what innovation is and isn’t, what gains can be achieved, what the barriers are, and how companies can create an innovation-friendly environment. They also gave examples of high-impact results their companies – Caterpillar, GE, The Home Depot, and Unilever – have been able to achieve through innovation.

The discussion was led by Heather Sheehan, Director of Member Engagement & Sponsorships, AWESOME, and former VP and co-Chief Procurement Officer, Danaher Corporation.

Panelists included Wendy Herrick, VP Supply Chain GTM US, Unilever; Michelle Livingstone, VP, Transportation, The Home Depot; Jennifer Schopfer, VP, General Manager – Transport Logistics, GE Transportation; and Barbara Schwarzentraub, Director, Divisional CFO, Caterpillar.

What innovation is

The stage was set for the discussion by moderator Heather Sheehan proposing a definition: Supply chain innovation is the implementation of sustained breakthrough process improvements to optimize customer response, cost, and asset utilization according to the competitive strategy of the business.

Panelists agreed that the current rate of change in the marketplace makes innovation critical. In fact, “If you don’t innovate, you become irrelevant.”

What innovation is NOT

Although the following may be important elements of innovation; they don’t by themselves constitute innovation. Innovation is not just…

Potential gains achieved by innovation

In addition to opportunities for major gains in revenue and market share, these are some of the typical gains achieved through successful supply chain breakthroughs:

Barriers to innovation

Panelists pointed out that innovation succeeds when it’s cross-functional, and that frequently requires crossing traditional boundaries and breaking down silos that still exist in many organizations. For that reason, the major barrier may be getting people to work together, share data, and step out of their comfort zone.

A basic first step for getting past barriers is to be very clear about the problem that needs to be solved, followed by setting aligned goals and targets and rewarding people based on those. Panelists agreed it’s essential to establish a culture where it’s ok to fail – and where ideas are rewarded even if they don’t always work out.

A diverse team with diverse thinking is another innovation driver.

Panelists also suggested that “Digitization is a key enabler to breaking down functional silos and silos across companies and businesses.”

Approaches to innovation

The companies represented on the panel face different challenges and have different needs for innovation. They shared some innovation strategies that have achieved good results at their companies.

Eight essentials for successful supply chain innovation

“The speed of change means we need to keep unleashing the talent of all of our employees much more than we have in the past. It means we’re not going to be so hierarchal. We’re going to have to make decisions throughout our supply chain and encourage that innovation.”