Transcript
Page 1: Unlocking innovation in the supply chain

Supplying Innovation: Unlocking innovative behaviours in the

supply chain

Keith Wishart (IBM), Jingchen Hou (CSA)

Cambridge Service Alliance Webinar Series 9th May, 2016

Page 2: Unlocking innovation in the supply chain

Content

Theproblem:theinnova1onbo2leneck

单击添加目录内容2

Majorstakeholdersandkeychallenges

Keysuccessthemes

Discussionsandconclusions

Thesolu1on:formanalliancetodeliveroutcomes

Thebackground:thechangesinindustries

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The background: the changes in industries

•  Weconductedthiscasestudyinanu/lityindustryintheUK,butthefollowingchangesarenotlimitedtooneindustryandcanbeobservedinmanyindustries.

Customerfocused

Endcustomersarepaidunprecedenteda?en/onto.

Outcomeoriented

Outcomesinsteadofoutputsaredemanded.

Highcomplexity

Itisdifficultforonecompanytodeliveronitsown.

Innova/ondemanding

Innova/oniscrucialtofulfillstakeholders’demands.

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The problem: the innovation bottleneck

Innova1onislockedwithinfirmsinsteadofinthesupplychain

Innovation bottleneck

Tradi1onalcontractsdonotprovideenough

incen1vesforoutcomes

Tradi1onalcontractualrela1onshipsimpede

jointinnova1on

Internalinnova1onoBenfailstogenerate

expectedvalue

Thedeliveredsolu1onsdonotimproveclients’

performances

Endcustomersdonotobtaintheop1mal

servicesandoutcomes

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The solution: form an alliance to deliver outcomes

TheshiIfromoutputstooutcomes

Suppliersarerewardedonoutcomesforendcustomersandotherstakeholders.

Endcustomersareincludedforconsidera1onaskeystakeholders.

Someresponsibili1esandrelatedrisksaretransferredfromclientstosuppliers.

Theforma/onofanalliance

Mul1plesuppliersandtheclientformanalliancetojointlydeliveroutcomes.

Theallianceisrela1velyindependentofitspartnercompanies.

Thecleardis1nc1onsbetweensuppliersandtheclientfadeaway.

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Major stakeholders of the alliance

Keystakeholders

Theclient

Otherpartners

Endcustomers

Extendedsuppliers

Theregulator

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Key challenges

Insidethealliance

•  Partnershavedifferentbusinessmodels.•  Limitedexperiencetodeliveroutcomes.•  Partnershavedifferentpastrela/onships.•  Partnerscompeteoutsidethealliance.

Outsidethealliance

•  Thewholeindustrywasnotcollabora/veandtrus/nginnature.

•  Thewholeindustrywasoutputdriven.•  Theindustrylacksinforma/ontransparency.

Collabora/onchallenges

Outcomemodel

challenges

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Key success themes

Strategicobjec/vesOrganiza/onalculture

EngendertrustEduca/onalcommunica/ons

Commercialsolu/on

TotexfocusRisk&rewardsharingBenefitsrealiza/onIncen/vizesuppliers

Opera/onaldesign

Con/nuingeduca/onInforma/onplaTorm

ProcessdesignMetrics/Measurements

Collabora/on

Keysuccessthemes

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Key success factors – collaboration

•  Suppress competitive behaviours and foster trust

•  Achieve the shift in mind-set through educational comms

•  Create a positive organizational culture based on partners’ cultures

•  Define the strategic objectives based on the outcomes to be achieved

Strategicobjec/ves

Organiza/onalculture

Educa/onalcomms

Engendertrust

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Key success factors – commercial solution

•  Facilitate the choice of optimal solutions that deliver outcomes

•  Incentivize extended suppliers on outcomes where possible

•  Benefits and risks are shared among partners; outcome KPIs are transferred to the alliance

•  The boundaries between capital and operational expenditures are eliminated

Totexfocus

Risk&rewardsharing

Incen/vesuppliers

Benefitsrealiza/on

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Key success factors – operational design

•  Design processes for everyday operations

•  Measure contributions of partners, track the achievements, etc.

•  Design platforms for the sharing of data, knowledge, and capabilities

•  Training sessions on customer focus and outcome thinking

Con/nuingeduca/on

Informa/onplaTorms

Metrics&measurements

Processdesign

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Discussions and conclusions

•  Thethreekeysuccessthemes–collabora/on,commercialsolu/onandopera/onaldesign–mutuallyreinforceeachother.

•  TheshiIfromoutputstooutcomesimpliesincreasedresponsibili/esandrelatedrisksforsuppliers,butalsoflexibilityandopportuni/es.

•  Theforma/onofanalliancetodeliveroutcome-basedprojectsprovidesopportuni/estounlockinnova/oninthesupplychainandtoaccumulatecapabili/esfrommul/plepartnerstomeetcustomerdemands,tofulfillregulators’requirements,andtogeneratebenefitsforpartners.

•  Therearerealchallengesfordeliveringoutcome-basedcontractswith

analliance.Sothismodelisnotforeveryproject,anddecisionsshouldbemadecarefully.

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Thewhitepaperiswri?enbyJingchenHou,KeithWishart,JonathanBaker-BrianandClaireVine.Itcanbeaccessedfromh?p://cambridgeservicealliance.eng.cam.ac.uk/news/2016MarchPaper


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