Supply Chains Urgently Need Innovation

Published: 31 Mar 2021

Supply chain managers need to be much more proactive in setting up and improving business models according to research from Professor Jack van der Veen from Nyenrode Business University.

In his recent white paper ‘Implementation of new Supply Chain Business Models: risk management in cross-border trade', he seeks to understand how new business models can be developed through taking a supply chain perspective.

His research reveals that the extra potential that becomes available when you bring together the worlds of the logistics and export manager is enormous. Companies can secure better customer value and, in the process, increase their performance on people, planet and profits by a collaborative approach with this expertise. Building a bridge between all aspects of the integral end-to-end supply chain.

However, according to Professor Jack van der Veen: "It is difficult for many companies to innovate their current business models and processes. The delusion of the day is often still paramount and therefore organizations hardly take time to take steps in this. Moreover, it is unclear to companies where to start once they have made time for it.

"We see that the business environment is changing rapidly. This is evident in the rise of China, trade wars, Brexit, the climate transition, technological innovations such as artificial intelligence and blockchain, the ageing population, e-commerce, social sustainability issues and of course the consequences of the coronavirus. In order to remain competitive in that world, organizations must constantly adapt and innovate. This is quite different from doing the same thing but better. It increasingly means that new business models are needed."

Van der Veen understands that especially for SMEs, a top-down towards developing new business models is used, after all most organizations are started by an entrepreneur. However, such approach has many limitations.

“A better alternative is to proactively involve all possible resources within and outside the organizations in creating a new business model. It makes sense to look at a business model from a supply chain perspective. After all, the supply chain professional has an overview of many of the vital processes in a company. He or she is an expert in organizing daily operations and is in a position like no other to bring sales, purchasing and logistics specialists together and ensure that they work together in implementing new ideas."

In the white paper, Van der Veen explains why this works better than simply ‘thinking’ in the boardroom. He believes that the current business model of an average company is often the result of the further development of multiple models over a number years, but innovations are crucial so it is not a question of whether, but how to best do this. This is not an easy task and there are also many risks, he says, but there are also plenty of opportunities and if all the functions within the company work together, new opportunities can arise. The COVID-19 particularly is situation is an opportunity for change and innovation that should not be let go.

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