Is Your Supply Chain Strategy Holding Back Innovation?

This is an excerpt of the original article. It was written for the July-August 2014 edition of Supply Chain Management Review. The full article is available to current subscribers.

July-August 2014

LEGACY Supply Chain Services has made company culture the centerpiece of how it drives innovation, efficiency, and the creation of value for its customers. Is it a model that others should replicate?

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In early 2011, Lamynix, a leading manufacturer of specialty laminates, was approached by one of its major customers with an enticing contract. VideoFlat offered a premium price to buy a protective film that was twice as wide as the usual size for its new generation of high-end flat screen TVs and computer monitors. The catch: In order to be ready for the product launch, the new laminate had to be in production within 12 months.

Lamynix understood that delivering on VideoFlat’s proposal within the allotted time would require a significant innovation effort. It also knew that this represented a golden opportunity to capture an emerging and promising segment in the specialty laminates market.

Lamynix and VideoFlat shook hands on a one-year, multi-million dollar contract. Twelve months later, Lamynix had failed to deliver the new product and VideoFlat walked away to look for a supplier that could meet its contractual obligations. What went wrong?

Based on our conversations with Lamynix personnel, the project’s failure could be traced back to the unwillingness on the part of individuals within the company to take ownership of the innovation effort. This was paradoxical: What could have been an opportunity to make a name for oneself within the company was instead seen as a hot potato that nobody wanted to hold. Another reason, we were told, was that Lamynix did not make enough cash available to finance the new product’s development. This was counter-intuitive, given that successful execution of the project would increase Lamynix’s reputation as a leader in the specialty laminates market and open the door to a fast growing and very profitable segment.

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