Innovation in Logistics, Final

Hopefully, you have gotten some good ideas from your creativity sessions.

Let’s take a look at those ideas and see whether they are really innovative and will help you to improve your business.

We’ll also cover an important, but often forgotten, part of the process…the implementation part, which we call “project management”!

LWL024 Innovation in Logistics Process INNOVATION PM

So, let’s start with the ideas that you generated.

Ask yourself whether your ideas meet the true definition of “innovation”.

The Merriam-Webster dictionary defines “innovation” as “a new idea, device or method”.

In the business world, we prefer to take that definition one step further, because if it isn’t making money or saving money, then WHO CARES!

So, a more accurate definition for “innovation” would be: “a new idea, device or method that adds value“.

Review each of your ideas and see whether they meet that very simple threshold:

  • Does this new idea, device or method help us to improve a process and, therefore, reduce man-hours or process steps?
  • Does this new idea, device or method help us to save money?
  • Does this new idea, device or method help us to generate revenue, increase profits or make more money than before?

If you answered “yes” to any of the above questions, then you may be on to something!

Be sure to take an objective look at each idea; have others review it; think it through and answer honestly. After sober consideration, you may determine that your idea will not qualify.

No problem.

The successful ideas we generate in logistics won’t be much different than those generated by some classic innovative industries such as the toy industry and consumer goods industry.

For instance, in the toy industry, one study showed that of 230 toy ideas developed in a given time-frame, only 12 ultimately made it to the store shelves. That’s only a 5% success rate!LWL024 Innovation in Logistics Process Toy Success Rate

In the consumer packaged goods industry, research found that failure rates range from 60 to 80 percent.

LWL024 Innovation in Logistics Process Consumer Goods Success Rate

And, these companies have huge budgets for R&D, outside “ideation” consultants!

So, be honest with yourself. It’s better to find the realistic opportunities and work them through to implementation, rather than waste time trying to implement something that is a dud from the start!

As you move through each idea think of it in terms of the below matrix. You should use a process like this to prioritize your ideas.

Of course, you will want to prioritize ideas. Hint: find ideas for the “green” quadrant!

LWL024 Innovation in Logistics Process Priority Quadrant

Remember, not all ideas are good ideas.

By assigning your ideas to one of the 4 quadrants, this will help you to whittle your ideas down to the great ones! Be sure to eliminate those ideas that you put into the red quadrant (low cost savings / hard ease of implementation); they will be a waste of your time with no payoff.

Once you have your final list of “innovations” and “improvements” it’s time to move on to the final phase: project management.

Now, you will need a robust project management team and process.

To be honest, the “creativity” and “innovation” phases were the relatively easy parts.

Project management can be a tough, drawn-out process that will typically involve multiple stakeholders with (many times) conflicting interests.

Lalit Panda, the Vice President of Supply Chain and Information Systems for Harman Consumer Group, says “taking an idea from conception to reality is a lot of work. Innovations require more than ideas. You also need infrastructure in place to implement ideas properly.”

We have devoted an entire article on project management. You can find it at “Pursue Projects with Persistence”.

Good luck on your efforts to come up with better ideas and innovations at your company.

Let us know about your successes and how you could have done better.

We need to learn from each other!

Click the following link for a PRINTER FRIENDLY VERSION of this article: LWL024 Innovation in Logistics Final

Inspirational Sources for this article:
Toy industry success rates from “Weird Ideas that Work” by Robert I. Sutton.
Consumer packaged goods failure rates from an article in The Pittsburgh Post-Gazette by Teresa F. Lindeman titled Innovation a tricky endeavor for Heinz, Kraft

Lalit Panda’s quote from found in Inbound Logistics article titled Innovation: A Fresh Eye on the Supply Chain by Leslie Hansen Harps

About Lenny

Many years of experience in a Fortune 1000 companies, especially in the logistics and I.T. areas of manufacturing companies. Through process improvements and the use of many of the tools mentioned here, I have been able to identify and implement savings opportunities worth up to $10 million. I hope that some of these real-life stories, suggestions and tools can help you!
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