Supply chain innovation – only through value creation!

The last three blogs I wrote, were about supply chain sustainability in real estate. These blogs triggered me to learn more about supply chain sustainability and learning in general. Therefore I have started the online course “Supply chain management: a learning perspective” by Professor Bowon Kim from the Korea Advanced Institute of Science and Technology (KAIST).

The course gives an insight into how to create value in a supply chain in the most effective way. In my daily work at Building Values, I am operating in different supply chains such as life science, technology, social infrastructure, energy transition, and real estate. Innovation and learning in these supply chains and value creation are different. It is interesting to experience that more value can be created when these industries work together and sometimes create new platforms for learning as is the case in the initiative of LifeSciencesRealEstate.org where there is an integrated perspective on life science real estate by scientists, universities, life science companies, governments, and real estate companies.

Innovations in the supply chain can only sustain if real value is created (Kim, 2000). New products or process developments that are only a tradeoff between the supply chain participants where there is no value creation in the supply chain (meaning it is only a zero-sum game), will not lead to sustainable innovation.

An interesting example of value creation in the supply chain is when “coopetition” takes place. Coopetition is the act when competing companies are working together in some form. This could be some form of cooperation with suppliers, customers, and/or firms producing complementary or related products. Li and Zhao (2022) show that coopetition is extremely important for high-tech industries to survive and to create value especially when life cycles are short and market competition is high. A good example is when Apple chose for the introduction of its new generation iPhone in 2018 to buy chips from Samsung its main competitor in the smartphone market instead of TSMC (Taiwan Semiconductor Manufacturing Company) which did not have its own brand of smartphone products. For Apple, it was more important to create the most value, reduce costs, and improve their product. Resulting in more value creation in the supply chain!

In my next blog, I shall give further insights on supply chain innovation, learning, and value creation.

Norbert Bol

Literature

Kim, B. (2018). Supply chain management: A learning perspective. Cambridge University Press.

Kim, B. (2000). Coordinating an innovation in supply chain managementEuropean journal of operational research123(3), 568-584.

Li, W., & Zhao, X. (2022). Competition or coopetition? Equilibrium analysis in the presence of process improvementEuropean Journal of Operational Research297(1), 180-202.

Photo: FLickr, Magnus Hagdorn

One thought on “Supply chain innovation – only through value creation!

  1. Dag Norbert,

    Zojuist lees ik net je blog, nadat ik een dag of tien in Italië ben geweest/heb gefietst.
    Je vorige blog heb ik daar of nog net thuis gelezen en naar aanleiding daarvan dacht ik twee dingen:

    Norbert zou best een duidelijker link mogen leggen tussen zijn onderwerpen en zijn onderneming;
    Je zou wat concretere voorbeelden (toepassingen) kunnen geven, van de studies die je beschrijft.

    En warempel, in deze column doe je het beide! Mooi!

    Het kan haast niet concreet genoeg zijn, haal heel concrete voorbeelden aan die jij in de praktijk toepast nadat je er wetenschappelijke studies over hebt gelezen. Of bevestig de waarde van wetenschappelijke resultaten aan de hand van je eigen ervaring in je onroerend goed praktijk. Theorie is goed, maar is nog beter als je het aan de hand van praktijkvoorbeelden kunt illustreren.

    Hartelijke groet,

    Herman

    Like

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