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The real keys to innovation: Knowledge and creativity

Technology promises to revolutionize the way supply chains are managed. However, in-depth knowledge and creative problem solving can enable significant supply chain innovations without the need for new technology
By Roberto Perez-Franco
Research affiliate with the MIT Center for Transportation & Logistics. He can be reached at .(JavaScript must be enabled to view this email address)
March 2, 2017

At a time when promising new technologies (Big Data, Internet of Things, Blockchain, to name a few) promise to revolutionize the way supply chains are managed, it is tempting to conflate the idea of supply chain innovation with new technology. However, to assume that cutting-edge technology is necessary for innovation would be a mistake; revolutionary innovation is possible without revolutionary technology. In-depth knowledge and creative problem solving can enable significant supply chain innovations without the need for new technology.

Consider the case of EuroPartners, a provider of international logistics services based in Mexico and serving hundreds of customers throughout Latin America. One of their offerings is the fast delivery of spare parts for specialized machinery. When one of EuroPartners’ customers orders a spare part to repair a broken machine, one thing is certain: The customer needs the part without delay. Every day a specialized machine is out of service, hundreds or even thousands of dollars are lost by the customer. Speed, therefore, is of the essence, and EuroPartners’ promise is to deliver the spare parts within 36 hours of the time an order is placed.

It is relatively straightforward to fulfill this promise when the customer is located close to an international airport with frequent direct flights from Mexico City. Using an airport-toairport priority cargo service, called Next Flight Out (NFO), EuroPartners can easily fulfill an order overnight. For example, an order placed before noon on a Monday by a customer located in Bogotá would be delivered at Mexico City’s international airport that evening, flown from Mexico to Colombia overnight, clear Customs in the morning and be ready to be picked up by the customer at Bogotá’s international airport shortly after noon on Tuesday.

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At a time when promising new technologies (Big Data, Internet of Things, Blockchain, to name a few) promise to revolutionize the way supply chains are managed, it is tempting to conflate the idea of supply chain innovation with new technology. However, to assume that cutting-edge technology is necessary for innovation would be a mistake; revolutionary innovation is possible without revolutionary technology. In-depth knowledge and creative problem solving can enable significant supply chain innovations without the need for new technology.

Consider the case of EuroPartners, a provider of international logistics services based in Mexico and serving hundreds of customers throughout Latin America. One of their offerings is the fast delivery of spare parts for specialized machinery. When one of EuroPartners’ customers orders a spare part to repair a broken machine, one thing is certain: The customer needs the part without delay. Every day a specialized machine is out of service, hundreds or even thousands of dollars are lost by the customer. Speed, therefore, is of the essence, and EuroPartners’ promise is to deliver the spare parts within 36 hours of the time an order is placed.

It is relatively straightforward to fulfill this promise when the customer is located close to an international airport with frequent direct flights from Mexico City. Using an airport-toairport priority cargo service, called Next Flight Out (NFO), EuroPartners can easily fulfill an order overnight. For example, an order placed before noon on a Monday by a customer located in Bogotá would be delivered at Mexico City’s international airport that evening, flown from Mexico to Colombia overnight, clear Customs in the morning and be ready to be picked up by the customer at Bogotá’s international airport shortly after noon on Tuesday.

SUBSCRIBERS: Click here to download PDF of the full article.

 


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