Manufacturing: Complex Supply Chains and their Impact on Innovation

Product innovation becomes more challenging in long and complex manufacturing supply chains. In order to get new products and technology into consumer hands, many large and small innovations must be accomplished throughout the entire production cycle.

An innovative new product may begin with design–or even earlier with financing the new design. Adjustments must be made to materials, processes, machinery, personnel, installation, and marketing. Even McDonald’s took four years to introduce the Wild Berry Smoothie. The new McDonald’s treat contained blackberries. If they had offered the smoothie immediately, McDonald’s would have depleted the country’s supply of blackberries. It took the corporation four years of partnership with growers to increase blackberry supply enough to support the new menu item. That’s a long time for something as simple as a smoothie.

We see another example of the complicated path to innovation in the automotive industry. In a recent Environmental Leader article, author Gary Vegh, describes the overwhelming group effort required to put innovative new automotive technologies on dealership floors. No single entity is able to perform sweeping changes to the entire production chain. Vegh proposes that some of the most significant and impactful innovations are the small-scale ones, although they do not always get attention outside of the industry. Many large and flashy innovations are only made possible by the smaller ones that take root and feed a more productive system gradually.

An example of a small-scale innovation that facilitates bigger ones is in software changes. The right software can monitor and minimize excess and control expenses in one area (e.g., automation of repetitive processes) therefore allowing increased resources into another area (design).

LBSi understands the complexity of the manufacturing supply chain. We also understand the power of software and technology to drive small-scale innovations that make way for bigger ones. For more information about how we can help, contact us.