This past Sunday, I watched the original Austin Powers movie. For those that don’t remember, the plot follows the efforts Austin took to obtain his "mojo" which was stolen by Dr. Evil. His lost "mojo" was the secret sauce that made him feel alive, adventurous and anew. In the movie, Austin loses his spirit in the 1960s and then obtains it back in the current day. All a very similar paradigm to the process industries.
Most of the innovation in the materials science industries came between the 1930s through the 1960s. After that, globalization took hold, so innovation stalled, and global reach became the name of the commodity market game. Even the specialty chemical products, which were the key for product growth, were sidelined to become commodities at the expense of this expansion up until about 2010.
But innovation is back baby! In recent years, nanoscience has emerged bringing to market new lighter, stronger, durable, and temperature sensitive solutions for a multitude of applications in clothing, health, consumer goods and even the environment.
The new buzzword is now “portfolio optimization” in the chemical and materials sciences industries which really means focus on what you do best. I do not know when that really became a new idea but that is a different story. As a result, this new shift in thinking we have seen M&A, joint ventures, divestures all to support this portfolio optimization. Bringing these new products now to market has impacted the supply chain professional in many new ways they were unaccustomed to in the past.
In this new portfolio optimized world, we have new stakeholders to collaborate with during the innovative and material planning process. Some of these participants may be long term or just a temporary relationship. There is also the obvious that the multitude of new SKUs and their variants require planning for which makes demand planning more difficult. As innovation increases and the product launches shorten, markets become more volatile and place increased pressure on the supply chain to adapt.
This is an exciting time for the industry but for supply chain executives new “Dr. Evil’s” challenge the status quo. Multiple skus, fulfillment models, levels of complexities that boggle the mind, and end-to-end planning that is almost impossible to imagine. One solution is a digital supply network (DSN), focusing on both new innovations and supply chain collaborative capabilities. This increased data sharing from connected partnerships and inter-business process ecosystems, enabled by digitization facilitates the integration of manufacturers with suppliers, customers, even research organizations for new product launches and supply chain execution. The point is that product innovation using a digital supply network transformation isn’t the end of the tunnel—it is the tunnel. It can take your business down unexpected paths including new customers, new products, and new revenue stream.
Digital transformation is the conduit for true mojo. So it may be that the chemical industry and other process manufacturing sectors may have finally gotten back their mojo. “Oh yeah, baby!”
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