DC Velocity - Digital 2018

Special Delivery

D isruptive technologies—innovative products or pro- cesses that supplant existing technology—are com- monly associated with leading-edge product development and new business models. Consider the disruptive influence mobile phones have had on the landline phone, personal computer, and music/entertainment industries. But disruptive technologies are not just of interest to consumers; they’re also relevant for supply chain managers. That’s because supply chain organizations can create profitable opportunities by utilizing disruptive technologies as primary drivers of innovative supply chain strategies.

There’s danger, however, in adopting disruptive tech-
nologies simply because they’re viewed as “the wave of
the future,” or because organizations worry that they’ll be
left behind if they don’t follow the crowd. We argue that
instead, it is imperative for supply chain managers to view
and implement disruptive technologies strategically, by first
considering customer needs, and then aligning appropriate
technologies with each supply chain application, avoiding a
one-size-fits-all approach. Doing so, we believe, will lead to
improvements in agility, customer service, and cost—and
allow you to be the disruptor, rather than the disrupted. In
this article, we offer a framework for evaluating disruptive
technologies from a strategic perspective.

DATA AS A DRIVER OF DISRUPTIVE TECHNOLOGIES

Typically, a new, disruptive technology initially costs more and does less than existing technologies; as a result, it often is actively ignored as a threat by rivals. But in many cases, the disruptive technology soon evolves into a high-quality/ low-cost offering that crowds out traditional technology. The impact of disruptive technologies is often felt most clearly by the incumbent firms that are being crowded out by them. 1 Examples include Kmart being elbowed out of the discount retail market by Wal-Mart’s innovative distribution practices and technologies in the 1980s and 1990s, or Dell’s desktop computers being supplanted by new processor, battery, and display technologies that accelerated the rise of laptops and tablets offered by Samsung, Acer, and Apple in the 2010s. Today data-driven technologies

Disruptive technologies have the power to upend supply chains, adding uncertainty, cost, and complexity. They also can create competitive advantage—but only if organizations strategically build them into their supply chains.