Future Innovation Paradigms - Potential, Opportunities and Threats

Transcription

1 Future Innovation Paradigms - Potential, Opportunities and Threats Supply Chain Technologies Frankfurt, January 17 th, 2008 Moderator: Kai Engel ( )

2 Introduction Dr.-Ing. Kai Engel Partner, A.T. Kearney, one of the leading global top management consulting firms. Kai Engel leads the European Innovation Service Practice. During more than 13 years of consulting experience he was responsible for numerous consulting projects and developed specific expertise in the areas of innovation and R&D management, manufacturing strategy, strategic sourcing and supply chain. He worked in manufacturing as well as service industries. He published several books about leading Innovation Management capabilities, of which one is concerned with Best Innovators Successful strategies of innovation leaders and initiated the Best Innovator competition, which runs in more ~10 countries in Europe and NA. Kai Engel studied Mechanical Engineering at the University of Hannover and Business Administration at the University of Braunschweig. After his studies he started his career in the area of laser technology leading an R&D department and a couple of large scale projects. 2

3 What are supply chain paradigms today and what are short term shifts? Selection Supply Chain Paradigms Drive reliability of supply at minimized unit (production) cost leveraging low labor cost opportunities in the globalized environment Very thoughtfully segmentation of suppliers in order to understand which ones should be truly integrated into the corporate supply chain Strong contract management Integration and collaboration SCM performance measurement Short Term Supply Chain Development Focus Next-generation SCM solutions to further cut costs while preparing an era of complex, multi-party relationships and even more dynamically changing customer requirements. Remove gap between planning and execution processes Enable cross-functional management Help them manage multiple types of supply chains Technology wise inventory optimization, distributed order management, multi-channel and collaborative demand management, and personalized performance management Supplier and global trade solutions to help understand inprocess and in-transit inventory, orders, and costs Personalized analytics and dashboards and performance management that helps manage forward activity, not just assess past results Better business process management, visibility/alerting platforms, and master data management... Source: A.T. Kearney... 3

4 Macro trends set the stage for innovations in supply chains and therefore need to be clearly understood Macro-trends affecting Global Economies Supply Chain Innovation Search Fields Demographics Information and Physical Flow Innovation Search Fields: Globalization Supply Chain trends Consumption Patterns? Transport (Air, Road, Water) Storage Production Distribution Natural Resources & Environment Wildcards Regulation & Activism Ordering Cash... 4

5 Globalization drives the re-organization of value chains and growth of emerging new players as well as business models Trends towards 2020 Macro-trend Category Macro-trend Impact (Selection) Globalization Increasing economic integration Increasing technological connectedness Increasing personal contact Increasing political integration Re-organization of value chain (distribution of tasks/geographic footprint) Emergence of new business models (structure and ownership of profit pools) Re-building of geographic supplier landscape Emergence of new players from emerging markets Shortening periods of pro-prietary product and process know-how Increasing rapid dissemination of knowledge 5

6 Demographic developments foster a geographic reorientation of industries and change customer demands Trends towards 2020 Macro-trend Category Macro-trend Impact (Selection) Demographics Growing, young population in developing countries Stagnating, aging population in developed countries Increasing migration Increasing urbanization Evolving family structures & role of women Increasing relevance of rapidly growing customer segments in emerging markets Fastest growing customer segments in developed and developing markets differ in demand structure Global geographic mismatch between skilled workforce demand and supply Trend towards mega cities triggers demand for urbanized product solutions 6

7 Changing consumption patterns and customer needs are impacting new product development Trends towards 2020 Macro-trend Category Macro-trend Impact (Selection) Consumption Patterns Emergence of mass markets in developing countries Increasing "soft good" consumption in developed countries Polarization of consumption (discount vs. premium goods) Increasing consumer power from new sales channels Increasing consumer diversity Differing need and demand structures between economic and cultural diverse markets Demand for customized, innovative, yet easy-tohandle products appealing to emotional/ symbolic needs in developed markets Low cost, "no frills, yet up-to-date technology products for fast growing middle class segments in emerging markets Full-scale introduction of new disruptive technologies (e.g. green hybrid, electric solutions) in value chains/products 7

8 Environmental crisis and short-running resources change the face of the industry Trends towards 2020 Macro-trend Category Macro-trend Impact (Selection) Natural Resources & Environment Accelerating natural resource demand Energy conservation/ Technology innovation Increasing environmental concerns Global climate change Continuous pressure to develop safe and environmentally friendly transportation and production technologies due to stricter and globally aligned environmental standards Shortening oil supply triggers technological changes Disruptive new green technologies emerging (e.g. hybrids, fuel cells, electro) Increasing competition over natural resources Increasing financial burden for mobility and transport solutions (e.g. fuel prices, taxes) 8

9 Tighter regulations combined with an alert activism continue to influence the landscape Trends towards 2020 Macro-trend Category Macro-trend Impact (Selection) Increasing tension (Public safety vs. citizen rights) Accelerated relevance of "green and fuelefficient as well as safety technologies Regulation & Activism Increasing tension (Globalization vs. citizen economic anxieties) Increasing tension (Privatization & deregulation) Increasing tension (Technology advances & government regulatory) Increasing tension among governments, corporations, and citizen activists Globalization scepticism fuels nationalistic and protectionist policies Host governments of emerging markets demanding fair share of R&D and production capacities Increasing need to manage community and environmental matters (e.g. safety) Growing relevance of NGO s highlights importance of corporate social responsibility 9

10 Supply Chain Technology Innovations need to accomplish future trends what comes next? Selection Recent Supply Chain Innovations Low carbon or carbon free transportation (LC/CF engines, mega ships/planes,...) Near Sourcing to increase sustainability of SCs Auto-ID technologies increase visibility of goods in the supply chain, reduce inventory requirements (e.g. for tracking of goods,...) Maximum automation in western production to cope with limited amount of workers available and high wages APO - Advanced Planning & Optimization (Map and Plan Networks) enabled by Internet Collaboration Hubs plan and control supply chains beyond the corporate boundaries create full enterprise transparency Observations so far Business initiatives failed (e.g. Cargo Lifter) Cheapest ships are fully utilized (Mega ships can not pass the Suez Channel,...) Automation requires technical capabilities, which are not available in all markets Cost advantages drive supply decisions, not easier controlling of SCs, end to end WC RFID has yet to live up to its potential Integrated supply operations require that supply chain partners cooperate, share information and trust one another this still needs to be realized Supplier enablement / portals, as technologies to mitigate risk, are not applied (portals, where suppliers are obliged to pro-actively update data, e.g. potential upcoming disruptions or failures) 10

11 Discussion What do you perceive as new or future innovation paradigms with regard to supply chain technologies in light of the described macro trends? What are the opportunities and threats? What can Europe and European companies do to capitalize on those? How should corporate innovation strategies be influenced to capture the opportunities and minimize the risks? What innovation policies can help? 11