Head of Supply Chain Insight, Alistair Balderson, considers how leapfrog technologies can pave the way for transformational change.
Winning in innovation
Last week, Morrisons and Blue Yonder were announced as the winners of our 2017 Supply Chain Innovation award. Their entry was for a new automated forecasting and replenishment system, which is transforming Morrisons’ approach to on-shelf availability.
This new system replaced a traditional method of in-store teams placing time-consuming manual orders, fraught with inconsistencies. Morrisons is now implementing an advanced data-led solution from Blue Yonder which incorporates cutting-edge artificial intelligence. This makes use of advanced machine learning algorithms – the more data it processes, the more intelligent it becomes. Morrisons’ intention is to leapfrog from behind its peers to leading the way.
The concept of leapfrogging is a driving force in today’s economy. It creates disruptive forces that can move a radical new concept into the mainstream space in what seems like no time, making intervening technologies redundant just as quickly. Sometimes this happens in a planned way, as Morrisons and Blue Yonder are aiming for with their new system. The alternative is more accidental, when technology leapfrogs ahead because users find a way to exploit the innovation in an unexpected or unplanned way. An example of this is M-Pesa, a form of mobile money originating in Kenya which has challenged traditional banking and cash systems which were not serving the needs of a rural population with little access to the formal economy.
In supply chain, there are many innovations with the potential to disrupt. We’ve recently published reports on Supply Chain Analysis exploring two such areas: Blockchain and the Internet of Things. Both are available on the Transformed by Technology hub.
But these new technologies present a big challenge to many established businesses. Perhaps you’ve invested a great deal of time and money over recent years to install and improve your current systems and equipment. Maybe the benefits of the new technology you’re looking at aren’t fully clear, making the payback analysis challenging. Should you minimise risk, retrofitting some small upgrades into your existing technology, or go all out and fully replace today’s kit with something new?
There are two key lessons that I take from the award-winning Morrisons and Blue Yonder case study which will help decision making, along with a final thought.
- If you’re already behind your peers, don’t invest just to catch up. You need to get ahead and create a competitive advantage.
- Technology is moving and changing quickly. Consider whether you can build up experience quickly enough, or whether you need to collaborate to get the benefits.
Finally, don’t forget that the world around you isn’t standing still and there will be plenty of others coming up behind to leapfrog you. The benefits of many of these innovations cannot be known in advance, because they only come from using it and making new connections.
Head of Supply Chain Insight