While the advent and use of the human baby incubator is immediately evident, outside of Neonatology it is likely less well known how enormous an impact the technology has made on infant mortality rates. I recently read that between 1940 and the new millennium, the introduction of the earliest incubator and subsequent innovation has contributed to an estimated 75% reduction in infant mortality globally.
In his book, Where Good Ideas Come From, Steven Johnson writes about how this breakthrough may have been more impactful than radiology, heart surgery or such medical advances. Why? The incubator allows a baby to be protected in its most vulnerable stage of life, giving it a chance to live a full life in comparison to the incremental 10 to 30 years offered by other important medical breakthroughs.
What particularly struck me in Johnson’s book was his description of the inventive methods developing countries have used to adapt the incubator design. Prior experience showed that imported devices had proven unable to withstand the weather, usage, wear and storage realities of developing countries. The user manuals too were hard to decode locally, let alone the cost of original equipment spare parts and repair know-how.
The updated designs accommodated locally available parts from everyday components instead of expensive precision-machined incubator parts. When these localized units break down or need replacing, having in-market replacement parts like automotive headlamps to provide the heat for the incubator or a motorcycle battery as an alternate power supply, allow for quick and easy maintenance.
It’s an example of inventiveness amplifying the value stream.
A question that begs to be asked is – might it then be possible and also about time, that a reinvigorated attempt is made to apply similar principles to the retail supply chain? Could innovation and shift in thinking be infused into what’s already available to devise a simpler, yet more effective alternative to current approaches being adopted across the value chain?
The constituents—suppliers, manufacturers, logistics providers, and retailers—generally execute their individual roles well. However, there is something to be said for end-to-end orchestration. There are walls between trading partners, supported by point processes, activities and solutions, each offering to locally optimize the constituent. While not intentional, parties’ actions appear oblivious, dismissive or distrustful to the needs, strategies, motives and tactics of others that actually are critical for their own success. Few are flexible and responsive; to the end consumer’s liking anyway; while costs are spiraling.
The disconnect between supply chain constituents is an outcome of choices in thinking, structure, behavior and actions. In research conducted by respected sources, key metrics such as product availability at the consumption point, the supporting inventory across the network and taming the ripple effect of demand variability have seen little improvement over years. The pursuit of the Holy Grail is relentless, yet the target remains elusive.
The good news is the parts to represent the whole are available, as are catalytic advances and innovations. Together, representing an integrated model of the supply chain is possible right now. Consider the following:
- Evolved thinking: Demand planning at every node in the supply chain is counter-productive. Forecasting at the point of final consumption and calculating the rest of the retail supply chain allows a common view of the end game, and supports discussions on assumptions and inputs versus fighting over which stakeholder’s answer is right. This provides all parties exposure to true demand patterns across the consumer landscape as it occurs; then applying streamlined policies and business rules. Constituents receive improved visibility that supports a holistic consideration of demand and best ways to shape and meet it on timely basis. All this is achieved while evaluating and maintaining efficient product flow strategies, optimizing cost to serve, and organizing and functioning as ‘one network’, representing a complete model of the business with collaboration on inputs and assumptions.
- New breakthroughs: Processing massive amounts of data quickly and economically is a necessary condition to make this evolved thinking practical, economical and possible. Cloud computing, predictive analytics, self-learning technologies, in-memory processing and persona driven user interfaces that enable real business workflows are available today. Agile and responsive planning capabilities that can depict and simulate a unified model have been unleashed.
- Structure: Key requirements to enable and sustain this shift include changes and alignment to organizational design, roles, responsibilities and accountabilities, operating models, hiring and training of sales teams, planners and operations across the network. The inherent design principle of an integrated, closed-loop system should accentuate secure, continual flow of information, enable collaboration and amplify trust between stakeholders. Early warning signs would allow for holistic review and mitigation of risks, as well as opportunities to create joint value based on “sell-thru” consumption versus “sell-in.”
The conversation is about enabling a model of the way information should flow from shelf to factory and, in turn, drive product flow and reflect real-life actions. Businesses that will see through the seemingly complex to uncover the underlying simplicity will be the ones that come out in front.
As Edison said, discontent is the first necessity of progress. It’s time for fearless, motivated leaders and forward-thinking companies to delight consumers and improve profitability, amplify productivity, reduce variability and enable more control.