The
Concept of Business and Technology
“He that will not apply new remedies must
accept new evils: for time is the greatest innovator”……Francis Bacon
“The business of life is to go
forward”….Samuel Johnson
Peter Drucker once said that " the business enterprise has two and only two basic functions: Marketing and Innovation. According to him, marketing and innovation produce results; all the rest are cost"
Innovation comes like burning sensations, when you are yearning to do something
differently; introducing something new. Some new idea, a method or device or
finding solution to a problem; togetherness brings unity or conformity. When
you loosen the broom to its individual sticks, it defeats its unity of purpose.
Team creativity calls for a special form of innovation.Organizations
are team, and to continually improve existing products, and developing new products
and services requires what I called team creativity.
Research has shown that
organizations which practices team creativity will survive and prosper. Those
who do not will probably decline and disappear.
The process of innovation begins with the creation, invention and discovery
with a focus upon the conception of the idea. Note, that innovation covers the
whole process whereby the new idea is brought into productive use. Eventually,
innovation takes us into the realms of supply chain, organizations, money,
buildings, management and production.
In this contemporary times, we cannot do away with technology, because
technology is in our DNA, whether you accept it or not. It is a fact!
Technology plays a key role in the Supply Chain. Innovation
may take place at the design level, in the kind of supply chain to be adopted,
or at the process level deciding how parts of the designed supply chain can be implemented. Technology may offer opportunities for either or both to be
addressed, and supply chains are changing as a result of technology adoption,
though perhaps not fast enough in some countries, where over-regulation and an unsupported infrastructure hinder rather than help.
The
Supply chain is the sequence of processes and activities involved in the
complete manufacturing and distribution cycle. This could include everything
from product design through materials and component ordering through
manufacturing and assembly and onto warehousing and distribution until the
finished product is in the possession of the final owner, the customer as well
as the consumer.
The
Business Landscape
Most
manufacturing companies are well aware of the changes that are taking place in
the business environment. These include increasing globalization, savage price
competition, increased customer demand for enhanced quality and reliability,
etc.
At
the same time, there are changes in technology which are enabling new forms of
working and trading. E-commerce is the obvious example.
Such
changes mean that manufacturing organizations need to re-appraise everything
they do if they are to remain competitive. They need to manage all aspects of
the supply chain to improve customer service levels and to reduce cost.
The
nature of the supply chain and the priorities to be met varies from industry to
industry and from product to product. The supply chain for a stable,
high-volume product should be engineered to be highly efficient, exploiting
economies of scale:
Just
in Time, strategic inventory, etc. That for a low-volume highly customizable
product should be engineered to be highly responsive.
In Type 1 manufacturing, characterized as make and sell. The
manufacturer determines efficient manufacturing parameters to build, using long
production runs, to create an inventory from which wholesalers and retailers
are supplied. The emphasis is on structured planning and scheduling.
The
rate of change in supply chain management is evidenced by the fact that the
major traditional proponents of type 1 manufacturing, the car industry, are
increasingly moving towards type 2. Many of the processes and characteristics
of type 1 manufacturing stem from the early moves towards mass, flow production
within the auto industry. The make and sell philosophy is nowhere better
typified than by the phrase "any colour you like, as long as it's
black". Now car makers get detailed information from their dealers on the
actual models that customers have ordered, and tailor their manufacturing
schedules accordingly.
Innovation in the Supply
Chain
Supply
chain management and innovation is much more important, and more difficult, for
type 2 manufacturing. Synchronization between the various players in the action
is critical and supply chain management is aimed at creating a supply chain
network which integrates information and action across organizational
boundaries. In the auto industry example, the information from many dealers
must be part of the manufacturer’s decision-making process and this information
must be collected and aggregated quickly if it is to be of any use.
Electronic
Data Interchange (EDI) allows fast, secure communication across such boundaries
but it has been adopted by only the largest manufacturers and supplier’s means
to communicate. It seems to have been regarded as being expensive and
unfriendly.
Other
communication routes are the Extranet, a web-based information service also
operating coherently and securely across a number of organizations and the
integrated Enterprise Resource Planning (ERP) system.
Many
organizations, especially large retail groups, have been experimenting with,
and piloting, Radio Frequency Identification (RFID) tags to track the movement
of goods. In most cases, such tagging is at the pallet level but as the tags
get cheaper, we can foresee the use of tags at the item level, especially on
high value items.
For
example, in mid-2006, Northern Foods, which is a major supplier to Marks &
Spencer, is tagging its supplies. Marks & Spencer, like a number of the
larger supermarket chains, has insisted on its suppliers using RFID, and now -
since it has over 100 food suppliers it is the country's leading user of RFID
tags with currently about 60% of the pallets that pass through its food
distribution centre’s being tagged. .
It
claims significantly better control of its supply chain but also suggests that
its suppliers are themselves benefiting. Northern Foods confirms this as it
sees the information that the tagging provides driving improvements in a range
of business processes.
A
modern supply chain network might include a mixture of classic manufacturing
software packages together with a web-based catalogue, an e-commerce
transaction and payment system and so on.
Examples
of innovative approaches to parts of the supply chain include:
§ Mass customization: The
buyer in a retail store perhaps chooses his or her individual form of the
product. The 'system' aggregates such individual orders and schedules picking,
assembly or production as appropriate.
§ Online bidding: This is a new model of
procurement in which a manufacturer sends a specification and drawing to a
number of potential suppliers, perhaps worldwide, and then holds multiple
bidding rounds until a mutually agreed price is reached within the parameters
of the bidding process. The UK government used this process in March 2000 to
auction licenses for the next generation of mobile phone services.
§ Shared distribution linked back to production: The
use of a shared warehouse to supply a number of retailers is common. However,
the technology now allows the data acquired at the warehouse as shipments are
made to retailers to be aggregated and used to generate automatic replenishment
orders to the manufacturer.
Some
of the changes that are possible may be encouraged or delayed by the
infrastructure, including transport links but also government policy,
regulation, legislation, etc. Governments
have their part to play in encouraging and supporting supply chain innovation.
In a global economy, elements of the supply chain can often be moved elsewhere.
In
the UK, there is a serious debate, for example, on the influence of joining or
not joining the Euro Zone, and the implications of the decision for
manufacturing organizations. The jury is still out as to whether the Euro would
trigger supply chain re-configuration or whether its adoption is basically a
financial and political event.
Now,
in my opinion, with the Brexit, Britain can have a more negotiating power and a
wider market to operate without many restrictions, depending on their
negotiations with other countries outside the euro zone.
In
brief
Supply
chain innovation is essential if manufacturing organizations are to remain
competitive.
An
efficient supply chain network can provide:
§ an
ability to source globally
§ online,
real-time information networked around the organization and perhaps wider giving
full supply chain visibility
§ information
management across, rather than only within, organizational boundaries
§ an
ability to offer 'local' products globally
§ improved
customer response times
§ lower
inventories
§ Shorter
time to market for new products.
To stay alive, is to innovate continuously.
To be continued……………
Simon Cobbina
Digital Marketing Strategist & Entrepreneur
sibecks09@gmail.com
Digital Marketing Strategist & Entrepreneur
sibecks09@gmail.com
https://www.facebook.com/sibecks09/
