Supply chains could lead the charge of innovation

‘The bedrock of innovation is constantly to question and challenge the assumptions’

Someone said: “If you do what you always did, you’ll get what you always got.” Many people have laid claim to this quote, including American author, entrepreneur, philanthropist and life coach Anthony Robbins and before him Albert Einstein, Henry Ford and even Mark Twain. Regardless, what matters is the point it makes.

Managing complex supply chains means we are often working with long-established, well-honed and complex processes. It only takes one small disruption to cause absolute chaos, so it is no wonder that we continue to follow established and familiar approaches. It is no surprise that those with complex international supply chains are most concerned about the short-term disruptive impact of Brexit.

Innovation is happening and supply chains could be leading the way

We increasingly work in changing environments with constant mergers and acquisitions, increased risk in supply chains, as well as heightened legislative and global political challenges. Organisations are struggling to translate a deluge of data into information that will support better decision-making. There is a shortage of skilled talent to clean, integrate and extract value from big data. In fact, in PwC’s 22nd Annual Global CEO Survey, 55 per cent of respondents noted that the talent shortage meant they had an inability to innovate effectively.

Yet things are moving forward; change sometimes feels faster and more dynamic than ever. Buzzwords such as artificial intelligence and blockchain are actual technologies being implemented in real organisations. They are forcing organisations to adapt quickly, preferably with minimal disruption and cost.

There are many ways for the procurement and supply profession to lead the way on innovation, and it doesn’t have to be centred on the latest technology.

Collaboration is the key. In a digitalised global economy you can’t manage a global supply chain without internal and external collaboration. Sharing cross-functionally and sharing with suppliers is a very powerful way to innovate. Encourage your suppliers to look at things differently and seek value. Ensure procurement and supply is seen as an enabler, not just a cost saver. Focus on the outcomes and how your supply base can bring innovation to achieve those outcomes, rather than just meeting pre-specified inputs.

Organisations are prioritising simplicity and visibility, designing networks that can be easily reconfigured to react to external circumstances. If an agile and flexible approach can be fostered without too much fear of breaking with the norm, an organisation can respond much quicker when innovations are presented, reaping the benefits fast and without having to wade through layers of process and due diligence. This can become a competitive advantage.

Innovation means not just sticking with what you know

Challenge the status quo. Larger suppliers will often be the harder ones to shift in terms of their approach, so look at the periphery of your supplier ecosystem. Smaller organisations are often much more able to bring the speed and agility that is needed. But often small and medium-sized enterprises (SMEs) and startups face huge barriers when it comes to working with large corporates and their unwieldy procurement procedures.

Many larger organisations have now created schemes to make it easier for SMEs to become suppliers. Open innovation platforms allow smaller suppliers to join the conversation. The State of Innovation Report from the Unilever Foundry, Unilever’s platform for startups, predicts that within five years all top corporates will be collaborating with startups. This is a big commitment and a fundamental shift in approach, so it’s essential you take the wider organisation on the journey with you.

The bedrock of innovation is constantly to question and challenge the assumptions; keep asking the question why? So why are you doing something you have always done and therefore why are you still getting the same results? Think differently and unlock the potential of innovation, to drive both efficiency and growth.