This document summarizes a study on supply chain innovation in the rail, marine, and automotive sectors. It identifies trends like globalization and cost pressures that are making industries risk-averse and focused on incremental innovation over disruptive innovation. The study found that 70% of companies lack formal innovation processes and have difficulties identifying and commercializing new technologies. It recommends providing benchmarking and collaboration tools to help companies adopt more sustainable and innovative supply chain practices that can significantly increase revenues and jobs through breakthrough innovations.

1. Transport KTN Supply Chain Innovation - Study
Preliminary Findings
Dr. Vassilios Albanis
Technology & Business Consultant
&
Steve Dore
Chief Executive Officer

2. • Review the supply chain operations in three sectors – Rail,
Marine and Automotive
• Identify trends and drivers across the three sectors
• Investigate the key issues and challenges in the supply
chain
• Review innovation practices in supply chain companies
• Assess the potential for adoption of market disruptive
innovation practices
Aim of Research
Competitive supply chain

3. Sustainable Supply
Chain
Cross Cutting Themes – Integrated approach across all sectors
OEM
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• Environment
• Economy
• Technology
• Society
Sustainable and innovative
practice to ensure that the future
supply chain grows and remains
competitive

4. • Economic – profitability,
competitiveness, growth
• Environmental – reduction of
emissions, renewable energy,
drain of resources
• Technological – emerging
technologies, new manufacturing
processes, innovation,
infrastructure, capacity
• Social – customer focus, flexible
working, changing demographics,
security
Trends and Drivers
Innovative thinking leads to sustainable growth
• Sustainable growth – “Rich
and green” vs “poor and
dirty”
• Re-assess current practices
• Facilitate growth with a
minimum environmental
footprint
• Proactive and adopt
innovative practices

5. • Globalisation – complex market,
price sensitive
• Market shifts – demand fluctuation
• Risk mitigation – end to end
management
• Conservative – slow adoption of
emerging technologies
• Cost driven – downward cost
pressure
Findings
Incremental Innovation – Disruptive Innovation
• Risk averse market
• Fragmented benchmarking
models
• Favours incremental
innovation instead of
disruptive innovation

6. Companies are seeking to grow....
• 84% companies are seeking to grow
• 65% to grow through new products
• 63% through introducing new services
• The rest through mergers and acquisitions
Actively seeking to grow

7. ..and the rewards are very high for innovators....
4X the revenue

8. ...but they are constrained by weaknesses in their innovation
processes....
 Innovation decisions ‘ad-hoc’ – Formal organisation 77% -
23%
 Identifying ‘breakthrough’ technologies 70%
 Picking winners & prioritising projects 70%
 Lack of formal commercialisation processes 61%
 Difficulties prototyping 44%
Lacking simple processes & access to facilities

9. ....which leads to companies becoming risk averse focussing on
incremental innovation....
Because they:
• Can’t identify and measure innovation performance 70%
 70+ metrics
• Innovation not part of corporate strategy 70%
 leading to…
• Difficulty in securing human and financial resources, and
• Poor internal collaborations
Risk averse with innovation marginalised

10. ...and they then focus on incremental innovation...
• Companies recognise that they are poor at the generation
of ‘breakthrough’ ideas
• Poor at external collaborations e.g. Universities
• Automotive Sector 2008
 3,300 businesses - £10.2bn VA
 384,000 jobs
 add breakthrough innovation gives £1.326bn additional GVA
 50,000 jobs
Breakthrough technologies = ££££’s growth

11. Summary
• Dominant trend – Cost reduction
• Sustainability compliance encouraged
• Emphasis on incremental innovation
• Breakthrough innovation – More profitable ideas
• 70% of companies lack organisation & processes
Recommendations
• Provide supply chain innovation audit benchmark
• Deliver appropriate processes, show-how & tools
• Platform for collaborative development
Summary &
Recommendations