Ktn Innovate 10 121010 Final

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Presentation on Innovation in supply chains

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Ktn Innovate 10 121010 Final

  1. 1. Transport KTN Supply Chain Innovation - Study Preliminary Findings Dr. Vassilios Albanis Technology & Business Consultant & Steve Dore Chief Executive Officer
  2. 2. • Review the supply chain operations in three sectors – Rail, Marine and Automotive • Identify trends and drivers across the three sectors • Investigate the key issues and challenges in the supply chain • Review innovation practices in supply chain companies • Assess the potential for adoption of market disruptive innovation practices Aim of Research Competitive supply chain
  3. 3. Sustainable Supply Chain Cross Cutting Themes – Integrated approach across all sectors OEM TIER 1 TIER 2 TIER 2 TIER 3 TIER 3 TIER 1 TIER 2 • Environment • Economy • Technology • Society Sustainable and innovative practice to ensure that the future supply chain grows and remains competitive
  4. 4. • Economic – profitability, competitiveness, growth • Environmental – reduction of emissions, renewable energy, drain of resources • Technological – emerging technologies, new manufacturing processes, innovation, infrastructure, capacity • Social – customer focus, flexible working, changing demographics, security Trends and Drivers Innovative thinking leads to sustainable growth • Sustainable growth – “Rich and green” vs “poor and dirty” • Re-assess current practices • Facilitate growth with a minimum environmental footprint • Proactive and adopt innovative practices
  5. 5. • Globalisation – complex market, price sensitive • Market shifts – demand fluctuation • Risk mitigation – end to end management • Conservative – slow adoption of emerging technologies • Cost driven – downward cost pressure Findings Incremental Innovation – Disruptive Innovation • Risk averse market • Fragmented benchmarking models • Favours incremental innovation instead of disruptive innovation
  6. 6. Companies are seeking to grow.... • 84% companies are seeking to grow • 65% to grow through new products • 63% through introducing new services • The rest through mergers and acquisitions Actively seeking to grow
  7. 7. ..and the rewards are very high for innovators.... 4X the revenue
  8. 8. ...but they are constrained by weaknesses in their innovation processes....  Innovation decisions ‘ad-hoc’ – Formal organisation 77% - 23%  Identifying ‘breakthrough’ technologies 70%  Picking winners & prioritising projects 70%  Lack of formal commercialisation processes 61%  Difficulties prototyping 44% Lacking simple processes & access to facilities
  9. 9. ....which leads to companies becoming risk averse focussing on incremental innovation.... Because they: • Can’t identify and measure innovation performance 70%  70+ metrics • Innovation not part of corporate strategy 70%  leading to… • Difficulty in securing human and financial resources, and • Poor internal collaborations Risk averse with innovation marginalised
  10. 10. ...and they then focus on incremental innovation... • Companies recognise that they are poor at the generation of ‘breakthrough’ ideas • Poor at external collaborations e.g. Universities • Automotive Sector 2008  3,300 businesses - £10.2bn VA  384,000 jobs  add breakthrough innovation gives £1.326bn additional GVA  50,000 jobs Breakthrough technologies = ££££’s growth
  11. 11. Summary • Dominant trend – Cost reduction • Sustainability compliance encouraged • Emphasis on incremental innovation • Breakthrough innovation – More profitable ideas • 70% of companies lack organisation & processes Recommendations • Provide supply chain innovation audit benchmark • Deliver appropriate processes, show-how & tools • Platform for collaborative development Summary & Recommendations

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