Empowering supply chain by converting energy into motion

Empowering supply chain by converting energy into motion

As we all mingled on the second floor of Fundació Antoni Tàpies, an art gallery in Barcelona created in 1984 by the artist Antoni Tàpies, many of us couldn’t help but notice a painted table bolted to the wall. Across the room, we found scattered paint strokes on a torn canvas that covered a rusty petrol can. That evening at dinner, the seemingly simple fruit centrepieces became glowing, smoking displays when the waiters poured water into them.

Contemporary exhibits such as these exemplified the tone of our 2016 Live Europe event called Innovation Powers Growth. The artwork sparked conversation among the attendees in our supply chain community and reflected the energy during the entire forum and also during our Live Americas event in Miami earlier this year.

In a physical sense, energy has the ability to convert from one form to another. Of course, here, energy refers to the palpable buzz from the artwork and the atmosphere, and when supply chain leaders are put in the same creative space, that energy becomes talk of innovation.

IBM’s Watson is one such innovation, especially with the supply chain offering that builds on the Jeopardy-winning technology to use “cognitive insights, driven by human expertise and machine learning (to) ensure confident, actionable decisions”. This quote exemplifies the potential complementarity of human-machine interactions that will develop confidence in the power of digitisation.

The rate at which work is done

Physics tells us that power is the rate at which work is done. As the customer experience is often a moving target, a substantial amount of work is required by supply chains to deliver on fickle expectations. One area of opportunity for supply chains to develop power from all of that work is through individualised products, which are valued by 90% of customers.Chart visualizing whether survey respondents think their customers value individualized products.The concept of customisation is not new to supply chain, as our survey tells us that nearly 60% consider themselves either first movers or fast followers. However, that leaves just over 40% to say that they are late adopters, or even that customisation isn’t a supply chain responsibility.

Of the many industries from which we’ve heard this year, healthcare in particular is representing the power of individualised products. In February, we heard about how the Pfizer purpose gets personal and how “precision medicine” can “increase the probability of demonstrating clear clinical benefit”. While later in the year, we saw Teva Pharmaceuticals’ vision for digitisation in delivering the right treatment, in the right dose, to the right patient.

Convert power into motion

We’ve long held to the idea that supply chain is the engine for profitable business growth; it’s the entity that connects suppliers and customers, and it enables differentiating response capabilities.

Once that’s evident, by definition, the engine converts power into motion. Two stalwart examples of the supply chain engine in motion are Mondelēz and Schneider Electric.

Mondelēz essentially reinvented its supply chain over the past five years as it emerged as a new entity. This reinvention started with what amounted to a blank sheet of paper, but also with high expectations for efficiency and cost reduction. It’s resulted in a strategy for business growth empowered by a supply chain that stresses simplicity and productivity.

Schneider Electric’s six environmental pillars include building an increasingly green supply chain. Its green supply chain is inspired by sustainability, but the broader circular economy that permeates throughout the company is an investment made not just because it’s the right thing to do, but also because it’s good for business. In Schneider’s eyes, “’circularity is just common sense”, and our 2016 Future of Supply Chain survey shows that other companies are finding similar opportunities.Table listing sustainability initiatives taken up by different companies.Innovation delivers breakthrough visibility

Connecting energy to work, and work to power, and finally, power to engines, sounds rather mechanical. While supply chain’s history is rooted in mechanisms and functionality, its future covers substantially more. At SCM World we are incredibly fortunate to see these stories every year and to reflect the views of the supply chain community in our research. In 2016, these stories and many more focused on how innovation powers growth.

In 2017, that focus shifts to total visibility and delivering breakthrough visibility of demand and supply for the digital future. Your story also deserves to be told.

We look forward to being part of that story, starting with Live Americas in Miami, 29 January-1 February 2017.

Your questions and feedback are always welcome via email at [email protected], or via Twitter @pvanhull.


Author Patrick Van Hull

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