• Micha Veen

Why should you introduce an Operational Innovative mindset in your Supply Chain?


In many organisations, Supply Chain, and Sales & Operational Planning, is seen as the engine of the business to deliver your customer value. To improve this “engine” companies have introduced operational excellence initiatives, transformations and technology to optimise the existing “engine”. But to allow organisations to deliver effective value, it’s crucial to transition towards Operational Innovation. Only through Operational Innovation, organisations are able to really radically optimise their “engine”.

Many Innovation leaders have started to use Formula1 as the model to introduce innovation. As in F1, even though it’s important to streamline the body, reduce the weight of the chassis and create an optimal engine through innovative solutions, unless all these innovative elements work in full harmony with each other, the individual innovations will not deliver an overall innovative result.

However, the challenge that many businesses face is how to start introducing innovation without overwhelming the employees. I’ve seen organisations, which have set-up innovation departments, multiple individual project innovations teams or tried to develop innovation processes. But creating real innovation across your organisation requires a different approach. The key to introducing innovation is to introduce an operational innovation mindset. The following key steps have been proven to be imperative to deliver operational innovation:

  • Start small, instead of creating multiple innovation teams at the same time, start with a single innovation team in e.g. transport or a specific area in the warehouse or distribution environment. It’s key to see innovation as planting “a seed”, and start small…

  • Ensure that innovation teams have a goal or target, which is aligned to the overall business goals or targets. These goal or target can and should continuously evolve. Additionally, innovation can’t just be executed in isolation of the wider business, but should be cross-functional, harmonised and integrated with existing departmental business goals and targets,

  • Innovation exists by combining different people with different experiences, different views and different expectations. By creating a collaborative team environment with these different individuals, innovation will have the biggest chance to succeed,

  • Reward innovative behaviours. This is key to support operational innovation. Therefore, creating a performance management environment with the relevant rewards is imperative to foster innovation in your supply chain or Sales & Operational Planning environment

Even though many executives and consultants still believe that innovation should be initiated through a technology or digital innovation, I have seen most Operational Innovation initiatives been initiated through innovative solution development without technology. Only when the Operational Innovation has been tested and validated, technology was introduced to further innovate the supply chain environment towards a solid and sustainable value chain.

So, the question in today’s business landscape is not if you should introduce Operational Innovation, but how do you introduce effective Operational Innovation to deliver a Formula1 “engine” in your business…

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