Today, a high performance supply chain is a strategic asset.
factors increase supply chain complexity, making constant innovation a
necessity, TechPro Personnel tells SmartProcurement.
innovative companies who build strategic, high-performing supply chains
more quickly gain competitive and financial advantages.
Global Supply Chain Survey 2013 found that companies with leading supply
chains achieve 70% higher performance and ‘significantly better
financial results’. ¹
And, as factors like intensified global
competition, shorter product life cycles, discerning customers,
increasing regulation, improvement in technologies and pressure on
natural resources deepen supply chain complexity, innovation has become
pivotal to survival and long-term success
As Tom Nightingale, writing
for Value Unchained said, ‘the historical lesson here is that, with
supply chains, innovation is an important accelerator’. ²
Innovation in South African Supply Chains
Recent research suggests that South African supply chains view innovation as an ‘important accelerator’.
of respondents to Barloworld’s supplychainforesight 2013 Survey believe
that ‘new business models require supply chain innovation’³, while 91%
of respondents to GE’s Global Innovation Barometer 2013 agreed that
innovation is a strategic priority for their company.⁴
Despite this, many feel that they are not yet innovating enough.
2013 found that while 73% of respondents ‘regularly evaluate and modify
supply chain strategy to align with business strategy’, 51% feel that
their Supply Chain and Logistics functions ‘don’t innovate regularly
enough, often due to company culture, lack of skills and fear of
GE’s Innovation Barometer labels this ‘Innovation Vertigo’
- or ‘uneasiness with the pace of change and confusion over the best
Yet, innovation is definitely an intrinsic part
of many South African supply chains, as the winners of the 2013 Green
Supply Chain Awards show.
The awards are a joint initiative between CILTSA, CGCSA and Supply Chain Today magazine.
examples, Unilever won the ‘Best Project’ award for the implementation
of a local programmable lighting control system at its Jozi Park
Distribution Centre that reduced ‘kwh’ volume usage by an average of
43%, with corresponding cost savings.
And, the RTT Group, who
received a ‘Highly Commended’ for their ‘Delivering a Greener Tomorrow’
project, achieved reductions of 57% in energy usage, 61% in waste to
landfill and used 35 million litres less water.⁵
innovation that has drawn attention is SEW Eurodrive, an ACM gearbox
specialist that overcame dependence on a single customer by shifting the
company’s product mix to higher priced products in alternative
industries, increasing turnover by 22% and production volume by 10%.6
Experts agree that the future of supply chain innovation lies in collaboration and people.
supplychainforesight 2013 found that future SCM success lies in ‘Serial
Innovation’ – ‘built on the principles of continuous improvement and
operational excellence’ - and ‘Smart Partnerships’ – ‘strategically
selected partnerships with key players across the supply chain’. Both of
these concepts drive ‘Sustainable Advantage’.³
Innovation Barometer found that the key to innovation lies in
‘Partnership’ – or collaboration – and ‘People’ – or workforce
preparation and talent mobility.⁴
And, while collaboration
between partners in the supply chain is being hailed as the way forward
for innovation, there are barriers to be overcome – most notably,
according to GE, a lack of IP protection, lack of trust and talent
Innovation is pivotal to future SCM success.
Clem Sunter said ‘competition in being original has just undergone a
quantum leap’.⁷ South African companies need to find ways to
continuously make that leap.
Are South African supply chains
innovating sufficiently to stay competitive? What innovative SCM ideas
have you come across? Join our discussion on LinkedIn.
¹: PwC Global Supply Chain Survey 2013
²: Innovations in Supply Chain Management - Past, Present and Future, Tom Nightingale
writing for ‘Value Unchained’, January 2013
³: supplychainforesight, Barloworld Logistics, 2013
⁴: GE Global Innovation Barometer 2013
⁵: Innovation Highlights 2013 Green Supply Chain Awards Winners, CILTSA, August
6: Supply Chain Management Problems at South African Automotive Component
Manufacturers, M.J. Naude & J.A. Badenhorst-Weiss
⁷: From ‘21st Century Megatrends’ published on www.news24.com