The Supply Chain: A Tool for Innovation

To put it simply, a supply chain should deliver high quality goods at a low cost, on time, every time. Let us imagine for a minute, how we could re-examine the supply chain as a tool for innovation and growth—something to differentiate with and to enable the realization of products and new marketing strategies.

Contemporary supply chains have evolved beyond their initial application as back-end product delivery systems. Now, they can deliver enhanced value that transcends efficiency, quality and cost. Let’s take a look at how this is happening.

Market leaders such as Amazon and Apple have innovated their business by thinking outside of the box. Apple, for example, are market leaders when it comes the supply chain, and have an advantage in the amount of products they can produce and sell. Amazon has put the supply chain at the very center of their business. Apple uses their advantage over competitors to secure exclusive contracts for components, and therefore freezes out competitors. In these circumstances, they can shape the market by restricting the supply.

Another example comes from paint suppliers, who are now capable of mixing and supplying paint on demand thanks to insights gained from an innovative supply chain system.

Customizing the supply chain is not just for paint producers—several industries are now seeing the benefits of an enhanced supply chain. Services such as same or next day delivery within the parcel industry, large-scale customization in the home computer market, and rapid delivery of new stock in clothing retail are all the result of supply chain development.

Thinking laterally about how you examine and develop the supply chain before going to market can affect the overall strategy with the effect of bringing new products and services online and expanding the business into new markets.

Another way to innovate further, once the supply chain has been completely exploited, as a resource for growth, is to establish new partnerships, such as the one forged between Best Buy and the Geek Squad. This enhanced Best Buy’s operation by adding the services business to theirs and opening up new markets. There are many options from within and around the supply chain, but when it comes to innovation, companies must find the right one for their business.

What have you done to bring innovation to your supply chain? Share your thoughts by commenting on this post, or our Facebook or twitter pages.