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Published: July 14, 2009

 
 

Debugging the Supply Chain

These and other innovations translated into tens of millions of dollars in additional annual operating income. Indeed, innovation at Cricket doesn’t apply only to grand ideas. But the approach we used to stimulate supply chain innovations could be replicated by any company transforming an operational system. The key is to consciously and consistently make innovation essential to the project.

We didn’t just elicit innovative ideas, we explicitly required them. We laid an “innovation framework” over all major issues, which forced discussion on conceptual matters, like how innovation fit into the company’s overall vision, and on more practical subjects, like how supply chain innovations could improve customer experience, help sales employees sell more products and services, and boost financial returns. At major decision points, project leaders checked to see what innovations had been suggested and incorporated. If there had been none, a brainstorming session was immediately initiated to focus on innovation.

The first step on the road to an innovative supply chain was to create the cross-functional forum. Called the White Room (signifying a clean sheet of paper), it brought together leaders from every part of the company — including supply chain, procurement, product development, sales, and marketing — to drive the forecasting and planning process. Outside suppliers were brought in, as well. The cross-functional team not only laid out the supply chain system plan; each member also monitored the system rollout and made suggestions for improvement along the way. All agreed that rather than assign blame for problems, they would commit to catching problems early and solving them immediately. As issues were resolved and finger-pointing disappeared, a high level of trust was established among the team members.

The team was so effective, in fact, that senior management decided to make the White Room permanent. Members now meet weekly. That requires a substantial time commitment from busy executives, but the savings produced by better forecasting and the continual visibility into operations has made it time worth spending.

The team also committed to moving quickly on new ideas. The tendency with fresh initiatives is to build out every last detail of the business case and process prior to launch. But at Cricket, the perfect does not get in the way of the good. If all the available information points to a quick return on investment, waiting for perfection can delay both the impact of innovative ideas and the opportunity to learn from their execution.

Innovation in supply chain management is too often treated as inessential, something that is nice to have after the basics are in place. By identifying hidden costs and actively seeking innovative ways to address them, Cricket did more than save money — it brought in new revenues. By integrating innovation into a larger strategic approach that reaches across functional areas, all the way to the end customer, Cricket was able to transform cost problems into rich new opportunities. It may be the rare company that grows fast even in a global downturn. Companies that consciously make innovation a key element in supply chain reengineering can gain a competitive edge, even in tough economic times.

Author Profiles:

Keith Buckley is the senior vice president for procurement and supply chain management at Cricket Communications Inc.


George Appling is a partner with Booz & Company in Houston, specializing in device management and operations for high-tech companies and telecom carriers.

 

 
 
 
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Resources

  1. Kaj Grichnik and Conrad Winkler, Make or Break: How Manufacturers Can Leap from Decline to Revitalization (McGraw-Hill, 2008): Analysis of how manufacturers and their supply chains can modernize for a lucrative future.
  2. Bill Jackson and Michael Pfitzmann, “Win-Win Sourcing,” s+b, Summer 2007: Highlights the need for knowledge sharing in supply chain innovation.
  3. Tim Laseter and Keith Oliver, “When Will Supply Chain Management Grow Up?” s+b, Fall 2003: An argument for companies to become supply chain savvy.