With the pace at which industries are being disrupted, it’s not surprising that innovation has become a key point of discussion for allbusinesses. But innovation is a vague and broad concept and many businesses find themselves stuck or unsure of how to approach it. There are two common misconceptions surrounding innovation. The first: true innovation has to be new. And second: supply chain innovation needs to be disruptive. Some in the industry make the mistake of becoming enamoured with chasing ‘shiny, new things’. Others mistakenly dismiss trends altogether. So, how should organisations tackle supply chain innovation?

According to a recent study conducted by BluJay Solutions and Adelante SCM, customer experience is the top factor driving supply chain innovation. Forward thinking businesses are moving away from competing on cost and placing customers at the centre of their supply chains, with customer experience becoming a key competitive differentiator.

Meeting the demands of modern customers Today’s consumers have more product choice and control than ever before. In the supply chain context, consumers expect fast fulfilment with full visibility across the delivery process. From order tracking to real-time updates on delays along the way, consumers want their interactions with brands to be instant and friction-less.

These changes in consumer expectations, tied to the rise of ‘the now economy’, have led to mounting pressure on supply chain and logistics networks. Gone are the days where shippers could rely on running their transportation networks with spreadsheets and a phone line. Businesses need the right tools and technologies in place for optimization and end-to-end visibility—and ultimately to survive in today’s economy.

Drivers of supply chain innovation

 Enhancing customer experience requires that businesses first build a firm foundation and get the basics right. Often, businesses lose sight of their purpose in the race to adoption.

Accordingly, customer-centric businesses are investing in transportation, warehousing and improving supply chain visibility. This is not a surprise, and no doubt these investment areas will remain important as organizations look to optimize their operations, decrease costs and improve customer experience.

 Conversely, laggards value customer experience far less and focus on cost reduction as a primary factor. Innovators are continuously looking for ways to differentiate themselves, focusing less on competing on costs and looking beyond existing systems. Adopting an outwardly focused approach to include flexibility, collaboration and an integrated solution are ways for supply chain leaders to continue to innovate.

Looking further over the horizon, we expect the next wave of investment will be in mobile devices and apps, followed by control tower visibility and warehouse automation and robots. These technologies are further along the maturity curve than emerging technologies like blockchain, drones and driverless cars, and have been proven to deliver benefits.

"Success with innovation doesn’t have to be disruptive; instead it is the combination of new, proven technologies and optimizing existing processes to achieve the desired result"

Top barriers to innovation

This sounds simple enough, but the reality is many organizations have become complacent with their present circumstances, or they view certain barriers to innovation as being too large or difficult to overcome. These barriers include:

• Silos between systems and processes – Operating in silos is one of the biggest barriers to innovation, and by extension, a barrier to delivering an enhanced customer experience. Laggards can leapfrog ahead eliminating the silos that exist between their systems and processes.

Outdated IT systems – Below average performers are relying on outdated IT systems, with some businesses still using Excel to manage their supply chain. While excel remains a powerful tool for collecting and calculating data, the reliance for supply chains can be a risk and susceptible to human error.

• The sheer pace of disruption – Fear, uncertainty, doubt, constant updates on new technologies and trends can be disillusioning.

Success with innovation doesn’t have to be disruptive; instead it is the combination of new, proven technologies and optimizing existing processes to achieve the desired result.

Despite all the excitement surrounding blockchain, drones and driverless trucks, these emerging technologies were found to deliver comparative lower innovative benefits to supply chain. There are straightforward steps organizations can take to modernize their operations— for example, upgrading from Excel—to optimize the supply chain, bring much-needed visibility, and be one step closer to being able to deliver what customers want.

Companies should start putting proper systems and processes in place now. The key lesson learnt is the danger organizations face from becoming overly complacent. Business leaders can be proactive by reviewing outdated systems and processes, and begin to optimize these. The people, processes and technologies that have made a business successful do not guarantee the company’s future success. It’s about adopting a holistic approach that considers the entire supply chain ecosystem and innovating with a clear objective to optimize the overall customer experience. Here, a customer-led business enabled with new technologies is the one to beat.