Supply chain management (SCM) is the term used to describe all planning and management tasks in connection with supplier selection, procurement and processing as well as all logistics tasks. Above all, supply chain management is about ensuring a good coordination and cooperation of all parties involved.
In practice, operative supply chain management tasks often take centre-stage. This focus on operative issues may, however, quickly make supply chain managers overlook the fact that supply chains consist of individual companies which pursue their own strategic goals and employ responsible people who may develop a slew of new ideas and concepts. Do you know what your suppliers are currently working on? Where they want to position themselves during the next five years? Or does your supply chain management focus only on just-in-time procurement?
New ideas often come from outside
I have repeatedly made the experience that it is easier to exchange new ideas at external events where people meet who work on the same issues and bear similar responsibilities in different companies. Or on the plane – you may learn something about exciting new manufacturing procedures in the electronics or tools industry from your neighbour. However, this way of gathering and processing information has a major disadvantage: it is accidental and unstructured. I have found that there is a way to make information gathering much easier – and to plan ahead.
A study by A.T. Kearney came to similar results: Innovation leaders develop more than one-quarter of their ideas outside their own company. Using ideas from outside does not only help to reduce costs, but also to outpace competitors and to create a unique selling position. A key precondition is, however, to know one’s own strengths and weaknesses and to look for alternative approaches.
Use suppliers’ know-how
It is therefore vital to cooperate more closely with supplier experts in some areas, as none of the involved parties has the know-how to create a unique selling position on their own. Only a combination of technical and application know-how makes it possible to achieve a unique selling position.
Would you like some examples? A combination of speech recognition and washing machines did not give AEG a unique selling position under Edzard Reuter in the 1980s. However, combining small computers (developed in the 1980s/90s), mobile technology (developed in the 1990s) and touchpads (which replaced keyboards) resulted in the iPhone. Had Apple tried to develop all these innovations on its own, it would have been far less successful.