In a white paper commissioned by DHL, Lisa Harrington, an innovation issue existing within businesses especially those in engineering and manufacturing industry has been thoroughly discussed.
According to Lisa Harrington, President of LHarrington Group, firms in engineering and manufacturing industry are not meeting the level of innovation needed in terms of adding competitive advantage and dynamic capabilities to respond to the rapid changes in the market as compared to other industries.
Industry Leaders since long have believed that with the integration of technology In supply chain management, a level of innovation and efficiency can be brought along with a fresh outlook to fix problems that have long prevailed.
The paper by Harrington puts light on a few existing trends that threaten to disrupt engineering and manufacturing businesses including; migrating manufacturing and regionalization, cost pressures and consumerism, and lifecycle sustainment.
Entitled as “The resiliency challenge: constructing the agile supply chain for heavy industry”. It finds that companies in both the industries operate at a very basic level and are the most costly supply chains in global industry leaving a momentous room for improvement in “resilience, flexibility, visibility and agility”. Harrington warns that delays in improvement will lead to critical damage to their market share from more innovative competitors.
Long ago, Bill Read, a supply chain strategy leader at Accenture, Ohio had put forward the same argument saying, “A company with a static supply chain strategy will not be successful in the future".
“Change won’t come easily to an industry populated by companies which have been around for over 80 years and are used to business as usual,” said Harrington.
“But it is imperative that they transform their supply chains to meet the demands of modern business with its onus on faster, leaner and more resilient operations. Those that do so can use their newly discovered logistical capability as an offensive weapon against competitors who fail to adjust.”
An innovative example of it can be the operational innovation at Apple Inc. Former employees, executives familiar with Apple’s operations have mentioned how the company has built a closed ecosystem to control over every piece of supply chain, right from design to retail store. ““Operations expertise is as big an asset for Apple as product innovation or marketing,” says Mike Fawkes, the former supply-chain chief at Hewlett-Packard, who is now a VC with VantagePoint Capital Partners. “They’ve taken operational excellence to a level never seen before.” A look at Apple’s supply chain management can help companies figure how what is the best possible way to overcome certain challenges and cut on profit-sapping strategies.
According to Lisa Harrington, “a new business paradigm is emerging to serve this demand; a lean, resilient and regionalized supply chain model in which global companies’ goods are produced, sold and consumed in the same geographic region.”
The question is what dynamic capabilities can companies develop to create a certain level of innovation capacity, to keep from add a competitive advantage in the global market?