The performance of a supply chain is judged by attributes such as agility, asset management, cost, reliability, and responsiveness. The trade-offs between these attributes tend to be between cost efficiency and responsiveness, with the objective being improved performance - greater responsiveness or greater cost efficiency.
One pathway to improved performance is typically called a "market scan," which is an assessment process with distinct phases in which each successive phase results in greater quantity and quality of innovation. The output of the market scan is then screened and evaluated to produce consensus on which innovative ideas should be tested and deployed.
Most companies are familiar with the market scan process. But as I wrote in a recent article with my colleagues Ramanan Sambukumar and Panos Tsiakis, too few companies take the first step of conducting a cross-industry assessment. By limiting their search to their own industry, these companies have eliminated the potential for a competitive edge that comes from true disruptive innovation.
So how does one go about performing a cross-industry market scan?
- The process starts with setting the objectives and scope of your scan, and the creation of a master list of potential outside industries and companies that are recognised to be supply chain leaders or innovators.
- Step two consists of an analysis that has three main tasks:
- Supply Chain Diagnosis: This is an outside-in analysis, using experts in your organization or an external partner, to identify your existing pain points and business challenges.
- Comparative Assessment: From your master list of outside companies you'll assess supply chain solutions that may be translatable to your business.
- Hypothesis Development: This is a set of hypotheses for your business based on the adoption of the identified cross-industry practices, and it should include both the perceived advantages of adopting the practices and the potential pitfalls.
- In the final step, you'll compile a list of possible actions and technology enablers for supply chain improvements utilizing the ideas gleaned from other industries. These should include how to address the potential pitfalls stated in your hypotheses. The list doesn't have to be exhaustive, but it should set the direction for innovation and drive future initiatives in your organization.
You can read more about cross-industry market scan assessments in our article, 'Market Scan: Why Cross-Industry Innovation is Important in Building Supply Chains.'