By Jim Rice, Deputy Director, MIT CTL
This is the first in the series of Innovation Strategies columns from the MIT Center for Transportation & Logistics. In the coming issues, MIT CTL will explore the development and implementation of innovative supply chain solutions and practices.
Revolutionary innovations capture the imagination and motivate people. But how many supply chain innovations (SCI) are truly revolutionary?
Not many, according to a recent study of SCI carried out by the MIT Center for Transportation & Logistics (MIT CTL). Most innovations in supply chain management build on existing achievements and reconfigure known methods and technologies rather than invent new ones. That doesn’t mean SCI is unexciting or largely irrelevant. On the contrary, incremental change represents one of the most powerful weapons companies have to stay ahead of the competition (see table). And, of course, some SCI’s do redefine markets. But in order to fully harness SCI, companies must distinguish between the steady and step-change varieties, and understand what it takes to implement them in terms of the organization’s strategic objectives. Inapt execution of an innovation can lead to costly missteps, particularly in today’s fast-paced competitive environment. Recall, for example, how companies misjudged the potential of early-stage RFID applications.