Inspiration and innovation: Essential scm ingredients

Inspiration and innovation: Essential scm ingredients

I have been involved in a wide range of innovative supply chain projects over the years. These have ranged from implementing something entirely new to overseeing a complex set of activities and related services. Most have been successful; some others have been technicolour failures.

One common ingredient with the successful projects has nearly always been the level of involvement and quality of leadership within the organisation. Where the leaders responsible showed indifference or detachment, the project teams were not empowered or faced insoluble constraints. Right from the start these projects were more like death marches _ unable to move forward without much pain and facing an inevitable outcome.

Flat structures encourage innovation: Supply chain projects in particular require strong leadership to exert necessary influence on the development and implementation of new ideas. For example, from a traditional environment of tight cost control and one-sided logistics service provider relationships, we have seen some existing businesses transformed into market leaders after working with innovative and inspirational market expansion service providers.

This new breed of service provider offers strategic leadership, experienced supply chain solution developers and skilled operational resources; they encourage excellence by bringing in very good people to support them. The positive effect is self-reinforcing. Clients are more easily inspired, solutions are developed jointly, with a much higher level of involvement and buy-in, and the benefits are shared across all parties.

The organisations able to maximise the impact of inspirational leadership tend to have flat structures that encourage development of younger line managers, with more direct access to senior management to properly support and develop them. Multiple site account teams can report directly to an inspirational supply chain director with cross-departmental support experts to take care of the more functional requirements (systems, processes, quality).

Modern trade success story: I have been coaching a team of enthusiastic, young, highly talented retail managers who are eager to learn. They face a big challenge: delivering modern trade logistics solutions in an environment where infrastructure development and work practices are at a very basic level.

Luckily, they work for an inspirational CEO who encourages new ideas and "suck it up and see" implementation trials. As a result, this young and largely self-taught team over the past year has successfully carried out a half-dozen complex projects that have had a dramatic effect on sourcing efficiency, inbound logistics improvements (cold chain), food safety, transport cost, environmental impact and on-shelf availability.

One environmental improvement project has had a direct impact on the bottom line by eliminating polystyrene packaging from the fresh produce supply chain in favour of returnable thermal logistics liners. Dealing with polystyrene packaging is an environmental disaster for developing countries, so improving the cold chain for fresh produce deliveries requiring temperature control is vital. Thermal covers reduce the reliance on refrigerated transport, in turn reducing transport volume on returning or disposing of used single-use polystyrene boxes. In an environment where cold chain infrastructure is limited and refrigerated road transport costly, fuel and vehicle usage costs have been reduced considerably.

World-first fish processing facility: Another example of innovation encouraged by inspirational leadership was the development from concept to operation of a 1,000-square-metre HACCP fish processing facility in just 20 days for less than US$200,000. The original proposal included a $1-million facility that would have taken four or five months to build, but facing time pressure, the team identified that 17 second-hand shipping containers could be converted, lined and delivered to the site in 10 days. Utilities and light building work took another 10 days.

The layout of the containers allowed a logical work flow for receiving, quality inspection, pre-cooling, basic processing, packaging and dispatch. Fresh fish ordered directly from certified farmers could be delivered directly to a "food safe" collecting centre, avoiding the unhygienic wet market and lack of traceability associated with traditional trade channels. To my knowledge this is the first time a full fish facility has been constructed from used shipping containers. It has since been extended twice at fraction of the cost of conventional modifications.

The above examples are just part of an overall supply chain project, developed and implemented in an Asian context, that is the most innovative I have been involved in. This level of achievement resulted entirely from the inspirational CEO leading the change, the charisma of the executives responsible for selling the project to the various stakeholders, and the confidence of the young managers who innovated and delivered a complex breakthrough solution. The model is easily repeatable _ with the correct inspirational leadership in place of course.


Weekly Link is coordinated by Barry Elliott and Chris Catto-Smith CMC of the Institute of Management Consultants Thailand. It is intended to be an interactive forum for industry professionals. We welcome all input, questions, feedback and news at: Barry.Elliott@Inslo.com
cattoc@cmcthailand.org

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