Where are the Innovative Supply Chains?Ken Bradley
Maybe I am just getting old and grumpy but I can’t think of any real supply chain innovation in the last 10 years except for the applications that Lytica has developed. I realize that this sounds self-aggrandizing but everything else just seems to get you the same answer, faster. This is not altogether a bad thing because I argue that faster velocity is necessary, but it does not represent a step forward in supply chain evolution.
The last real innovations that I recall representing a departure from the norm would include the birth of the EMS industry, WalMart’s introduction of VMI (nanosecond inventory ownership) and Dell’s business model enabling an improved cash-to-cash cycle and a sell-what-you-have approach. These are all over 20 years old, though I may accept RFID tagging as another, more recent, example. If I have missed any let me know.
Why is this a problem? The pace of change is accelerating and staying with tried and true business practices may be setting you further and further behind early adopters. My customers, as early application adopters, are making significant strides against their competitors.
Most of you have heard of Moore’s Law which is just one example of acceleration, but this acceleration is not a recent thing. It has been going on for millions of years and it continues today. This biological and technical evolution is described by Ray Kurzweil in his 2005 TED talk “The accelerating power of technology”. Ray is an American author, inventor, futurist, and a director of engineering at Google. Watch this video and think about your supply chain. If you do not become very uncomfortable, watch the video again. You should be uncomfortable with the status quo and impatient with your supply chain progress.
Supply chains are about getting appropriately priced products to customers when they need them. It is all about planning, building and shipping, which involves business processes for forecasting, fulfillment, inventory, vendor selection, logistics and much more. How will you respond when someone else comes out with an innovative new way: a better product, a faster, more responsive delivery or a lower cost? What have you done with your business processes or products that have set you ahead of the competition? Is your evolutionary process stuck?
In the book I am writing, titled “Supply Chain Fundamentals: A Guide for Electronic Designers and Supply Chain Professionals”, I will address issues like these. I would like your help in writing it by getting your feedback on the subject and content. A draft of the Table of Contents and Chapter 1 are currently available on Lytica’s website. You can download the drafts for review and provide feedback through the comments section on each content page. I want this book to be comprehensive, readable and useful to anyone in our industry.
The concept of acceleration with time has intrigued me since I was first made aware of it years ago and saw it in action. When I look back, I can come up with examples where tried and true methods have been replaced by better ways. Wikipedia replaced encyclopaedias and e-books are affecting bookstores at an alarming rate. Most industries are transformed in unimaginable ways — industries like music or medicine — yet, when we look ahead, we often extrapolate from our experience using a slower than current time line and ignore enabling technologies or applications. We shouldn’t be surprised when we are caught by surprise.
Does acceleration with time matter in supply chains? Unless supply chains don’t matter, it should. What is your view on this? Can supply chains differentiate a company?
By Ken Bradley – Lytica Inc. Founder/Chairman/CTO