Innovation in logistics is the future – but where does it come from?
1913 Highland Park moving assembly line, © Ford Motor Company
Expect the unexpected
Everyone has expectations of progress, but innovations always startle us. We all want to innovate because innovation is the rock-star of progress, but innovation is truly rare and we generally find it comes from a rarefied few, the Henry Fords and the Steve Jobs.
This rarity is because Innovating is not about bridging awareness gaps or filling in missing links. Innovations are always surprising and occur unexpectedly. That’s why they’re innovations, not improvements.
We crave innovations, but there is no clear conception or guidance as to what these could or should be. They appear suddenly amongst us as the obvious cure for a variety of specific ills. The absence of innovation builds a pressure and a yearning for something or someone to fix what ails us.
“ But how important is innovation? I think the customer really needs to be more honest with their 3PLs on the need for innovations, while 3PLs need to clarify where their expertise lie. ”
– Barry Blake, SCM vice-president of research
Of course, you may proclaim your honesty and pledge expertise, but who defines the meaning of these things or what they stand for in practice? How do you differentiate from others if you don’t know the difference yourself?
Compounding the conundrum is the fact that those who need innovation the most are themselves not innovators. There are numerous examples in our industry of spectacular and expensive failures, grandiose projects dead on arrival because their creators failed to recognize their own limitations. You cannot force innovation just because someone or something is squeezing you. Innovation arrives through insight, inspiration, intuition – and interestingly, denial.
“ Innovation is saying no to a thousand things. ”
– Steve Jobs
Innovation sells, but who’s buying?
“ I think there is an endemic problem from the buyers’ side. They want something beyond just shifting boxes, but they end up grinding down their suppliers on price – the buyers are not paying for what they want, which they say is innovation. ”
– Kevin O’Marah, SCM World chief content officer (Source: article)
Clearly, customers do not pay for innovation and innovation is not an end in itself. Customers pay for the added value delivered by innovation. The core business, powered by innovation, becomes the generator of these added values. Faster processing, eFreight execution, ultimate transparency and unlimited door-to-door monitoring are examples of added values beyond just shifting boxes. The cost associated with the fulfillment of performance expectations may not be recoverable directly. But ultimately it pays for itself through increased efficiency, lower costs and customer loyalty.
Innovation comes from innovators
“ Forwarders have got to be more innovative – you can’t just roll along any more, you have to be proactive. You have to invest more in IT and communications as a selling tool – it doesn’t matter how nice you are or how good you are, you need to be cutting edge. ”
– Anonymous Forwarder (Source: article)
The first steps in solving the problem is the identification of basic needs. IT and communications are keystones in this process since they are at the heart of building closer collaboration.
Closer collaboration automatically results in integrated connectivity, more efficiency, less failure, higher profitability. Hand in hand with customer and user satisfaction. All Assembled to achieve a USP and a stronger position in the market. That’s what innovation in logistics is all about, not an imaginary new feature or a new virtual service nobody wants or needs and consequently wouldn’t pay for.
A forwarder is designated to forward, not to innovate. Innovators are designated to innovate. Don’t go on an innovation trip for innovation’s sake. You’ll waste time on issues beyond your core competences. Go buy innovation! It’s there, and it will deliver.