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Improving supply chains through innovation

Posted: 09 Nov 2015     Print Version  Bookmark and Share

Keywords:supply chain  innovation  risk 

While some purists tend to associate supply chain management to a rigid procedure, it should be worth considering that perhaps, the process can accommodate a certain level of creativity. In much the same way that baking in an 'exact science,' cooking could work in guesstimates and approximations. What then should supply chains adhere to? Should they be undertaken as a form of 'baking' or 'cooking?'

"Culture will eat strategy for breakfast, lunch and dinner, anytime." This was the first sentence that the professor of marketing and strategy uttered during our first MBA class at Georgia Tech. He underlined his point with the story of how Kellogg's tried to conquer the Indian market with its breakfast cereal.

The company was trying to sell corn flakes with cold milk as breakfast in the Indian market, a culture that eats a warm breakfast finished with a hot, thick, creamy, flavourful coffee (A quick digression here: one of the most popular coffees in India is made from the freshest milk, gotten from "only grass" fed cows just minutes before). India already had popular and well-loved breakfast foods: the idli, a fermented and steamed rice cake with probiotic that makes digestion easier and is called "the most healthiest food ever" with double superlatives; and the dosa, a fermented rice crepe. The corn flake with cold milk did not take off as Kellogg's expected because that product did not fit within the culture, especially among the South Indians.

Kellogg's corn flakes

(Source: Pixabay)

This was a failed attempt at innovation. Which brings me to the question of today: How can one encourage innovation in the supply chain? Innovation tends to be considered a bad word in the supply chain space, because the supply function generally focuses on risk mitigation. The supply chain culture can be compared to the Asian culture or perhaps the military, which has a focus on conformity, simplicity, working together and taking orders through a chain of command. It's not so much about standing out, but all about blending in. There is a laser focus on delivering merchandise in a mission critical fashion.

New ideas are often considered risky and non-conforming. Above all, nobody wants to lose his or her job. Also, a good number of folks in the supply chain leadership roles have a military background. When I worked for Hewlett Packard, many of the project managers and programme managers came from the armed services. They were all hired for their leadership skills, but that came with this risk mitigating culture as well.

Indian breakfast

(Source: Pixabay)

Knowing all this, it is really important to take extra steps to encourage and foster a culture of innovation. Innovation involves calculated risk taking, the ability to establish an effective process to learn from the mistakes, and an emphasis away from fear of failure and toward maximising lessons learned.

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