Disruptive supply chains

Even though the year’s not over yet, ‘disruption’ is already the word of 2015 as far as I’m concerned. The Dutch financial newspaper FD writes about it almost every week and has even developed a handy ‘disruption meter’ per sector. It was also the topic of Mike Burkett from Gartner in his opening speech at the firm’s recent supply chain conference in London.
Thanks to new developments such as 3D printing, the Internet of Things, advanced analysis software and drones, we are heading towards a volatile world of increasing cross-sector competition, which is bringing with it a new vulnerability. Burkett advised companies to stay alert to new entrants: “Digital start-ups are emerging in every department – in marketing, HR, IT, sales and logistics.” It is therefore crucial to keep a close eye on talents and to set up a separate department dedicated to experimentation, as BASF and others have done. He also referred to a relevant quote from the ex-boss of General Electric, Jack Welch: “If the rate of change on the outside exceeds the rate of change on the inside, then the end is near.”

During the same event, the tremendously inspiring speaker Hamish Taylor, who earned his stripes as a brand manager at Procter & Gamble and later as CEO of Eurostar, was equally clear on competition: “If you’re running a race and someone’s close behind you, you simply have to run faster. If you want to achieve a breakthrough, then you have to look outside your current environment. If you want to improve customer service, it’s essential that the frontline staff and supply chain colleagues share their practical insights.” Taylor mentioned the emergency rescue services as being a good example for the supply chain sector: it’s all about speed and everyone understands the ‘why’ behind their role.

In previous columns I’ve drawn comparisons between the roles of the eleven players on a football side and the departments within a company. The same analogy still holds for large companies, but they need to be aware that disruptive start-ups have decided to ignore the traditional rules and to play a different game with fewer departments (players), such as ice hockey or basketball. These are disruptive, agile supply chains that are capable of winning against the ‘old order’.

Martijn Lofvers
Publishing Director & Chief Editor