How Companies Manage Innovation Within Their Supply Chains


Innovation is the act of creating or introducing something new in terms of thinking, products, processes and organisations (Saks, 2006). Launching of new ideas and inventions offers outstanding opportunities for development within organisations. Good management is important, because even with the proposal of innovation to a company, the success of the presentation relies highly on qualified managerial skills. Customer satisfactory is the main purpose of several companies; application of this factor subsequently results in achievement of the targeted goal (Buch, & Aldridge, 1990).

Management of innovation applications

Managing innovation in a company can be quite difficult and time consuming especially when addressing individuals. Such a situation raises the matter of team work so as to lessen the load on the management (Mitchell, 1997). Combating the encouragement of innovation from the staff, if they work in groups will concurrently lead to members consulting, choosing the best offers and combining their efforts, to come up with the best idea (Mukherjee,. 2005).

Development of innovative products and processes maintains a lead over rival companies (Murray, 2008; Jenkinson, 2006). The teams should have less formal structures to reduce tension among the members; this can be a means to increased innovation in the institution. Ideas of innovation are usually brought about by interaction between employees and in other cases between employee and customer interactions. The development of the concept and its implementation are also as a result of interaction on how best to approach the matter (Waters, 2006).

The work of the management is to direct the operation by pointing out the type of service idea that is being targeted and choosing the people to work on the innovation program. Intense interaction among team members plays the main role in the company, whereas external interaction and involvement of the top management is also included (Claydon, and Beardwell, 2007). The rest of the organisation is engaged in the final employment of the program. In the growth of new service ideas different roles are brought out in the process of innovation. Roles have different functions in the campaigning of innovation management. A core concept within social psychology and sociology is role (Sicard Associates,&Frank., 2002,).

Varying views and ideas from employees which offer opportunities for innovation through interaction are an integral part for strategy building, and the result being break-down of certain barriers. For example communication barriers, as a consequence of team work (Sammut., 2001). This is possible due to new ideas from interactions between cross-functional and cross-hierarchical relations during the exchange of and sharing of concepts. Obvious effects of such a strategy are increased self reliance, assurance and confidence when dealing with staff delivery.

Technology innovation

Innovation as a top growth priority by majority of the managerial staff has had an immense impact in the technology industry. The emergence of the internet and social networks in the recent years has partly been influenced by the need for technology innovation. As with the advantages of the internet, organisations have been able to create websites thus marketing and advertising their products. Consumers equally benefit since they can interact with their preferred companies and offer their ideas for the development of the company (Fischer., 1989).

Inventions like the web sites and web pages are updated by the companies they represent. Consequently the consumers are always informed of any changes in the company and do not have to visit the headquarters for certain information. The personnel in charge of these sites are always looking out for innovations so as to maintain a lead over their competitors. Networking with various partner companies will assist in creating a strong foundation when it comes to innovation of the organisation at large (Joel., Keah Choo Tan,. Keong Leong 2008).

Though it is not only cyber technology that is vital to development other machinery has also been invented to contribute innovation technology. The range is from, inventions in the communication, transport and scientific sectors. Examples are cell phones, electric vehicles and microscopes are just few mentioned of the existing inventions. Conceptions of various equipment are taking place daily, thus are innumerable and competition is stiff (Kandula, 2004).

Interactions of the personnel on grounds of innovation opportunities provide a chance for the employees to grow as individuals. This increases productivity and staff output, it also challenges them to prove themselves in the office. Innovations have not only made working easier but have saved a lot of time that could have been spent by a single person trying to come up with better strategies on company development.

Recognition and rewarding the most effective teams is important, this is to enhance their motivation. Encouragement of the groups is crucial; they need to know that their efforts are appreciated, effectively boosting their morale.

Supply chain management (SCM)


Supply chain management is the direction of interconnected businesses involved in the provision of product and service packages and is strategy where buyers and sellers collaborate to bring greater value to the customer. Companies connected by participation in supply chain usually are without deviation connected to one another by uninterrupted stream of goods, packages, especially from their origin to the consumers. Supply chain management is the application of a supply chain preference to suppliers and consumers.

It is the strategic and systematic coordination of the conventional business affairs within a specific organisation and business within the supply chain; for the intention of developing the long-term performance of the individual company and the supply chain as a whole. Management is on the brink of discovery in understanding how developed company success depends on the interactions between the flows of information, material, money and team work. (Rodríguez, 2010) gave a definition of supply chain management as the administration of higher or lower connections with distributors and consumers, bringing to a destination to the consumers worth at lower rate to the entire supply chain.

Supply chain management has been repeatedly confused with logistics. Logistics is centred on entity business with the serving as or indicating the motion or characteristic of products, collection of facts, reserve supply that can be drawn upon when needed from the precise location of foundation to the precise location of expenditure in order to make the consumer comfortable.

Chain management is guided by technological innovation and the internet in reduction of distances and duplication of communications at a faster rate compared to when it was only the archaic means of communication that existed such as use of messengers. The internet can be considered as an enabler in aiding organisations to fit consumer request (Blair, 2007).

Management constituents

Successful completion of supply chain tasks is of key importance, thus a need for management components is presented. The components determine how individual procedures are supervised and how they are incorporated. These components were divided into two main categories (Business Change Forum. 2010).

  • physical and expert components; which are further divided into subcategories:
    • Planning and control systems; which ensure that the supply chain runs smoothly and the results can be equated with the targeted goals on an ongoing basis.
    • Process structure; indicates how execution of activities and duties are carried out. Making it easier to construct familiar grounds on routines for activities within the supply chain.
    • Organisation structure; aids in management of different departments at the same time maintaining order.
    • The structure of information flow; has immense influence on the supply chain’s strength. The development of the supply chain depends on information exchange between affected departments and companies.
    • The structure of product flow; is all about the control activities and the sequential production processes the commodities go through and their execution.
  • Operational and behavioural components; greatly affect the supply chains growth and have to be delicately tackled for consumer satisfaction (Taggart, Tyndall & Cameron. 1990).

Innovation in supply chain management

Supply chains offer greater opportunities for innovation because they are network based and need for all the operations to be linked in one way or the other is always present. This has led to ever arising emergence of innovation in the companies. As was earlier stated under physical and expert components, information flow is crucial. Communication is useful in keeping track of all the daily happenings of the organisation. Constant exchange of information develops an organised and smooth flowing system (Mullins, 2006).

High quality products are to be ensured to all customers. Innovations have assured that products are up to the standards demanded by both the company and the consumer. Machinery for production processes are often expensive but are good investments. With ever growing technology revisions are dynamic and ceaseless. Hence the supply chains should always be ready to purchase equipments for their own benefit. Peltier., Schibrowsky., Schultz, & Davis, 2002a)

Structures of organisation assist in team building for interaction, positions of individual staff members. It is usually very detailed and work load is reduced because all members know their duties, addressing them better.

Process structures, from the acquiring of raw materials and the delivery of the final product, to the consumer all follow certain procedures (Phelps., Harris,. & Johnson, 1996). The development of procedures is for better assimilation and application of the functions available. Innovations of better processes, improve productivity and should always be encouraged in the supply chain since they are more complex than individual businesses (Davenport, Harris, and Kohli, 2001).

Therefore these physical and expert components directly and indirectly target innovation in one way or the other. These just shows how the constant evolution of innovation processes are mandatory in supply chain management. Management of these processes by the right directors will go a long way in implementation of these innovative processes (Bodin, 1991).

Problems of management of innovation in supply chains

Just like any other organisation supply chains incur problems. If the organisation prepares itself prior to the occurrence of the issues it will avoid being in debts and incurring losses. In preparing early all issues may be dealt with before they advance and nothing can surprise the company management. One problem that faces supply chain management is disruptions in production (Metcalf, 1995; Schultz, 1999).

As a consequence there will be a decline in products and that does not mean that there will also be a decline in demand from consumers. It is vital that all the procedures of production are followed to the latter. The equipment used should be tested from time to time to ascertain that they are working efficiently. The personnel should have workshops and trainings to sustain high standards of output. Henceforth losses incurred due to disruptions’ in production (Pendleton, and Robinson, 2010).

Process limitation is an issue that affects innovation in supply chains. This brings up the matter of different departments being managed by in individuals who report to the head of chief (Nedelko. 2007). Issues will then be easily addressed and company processes will not be deterred. Limitations in a company only enhance the competitors business while the other company slowly but surely crumbles (Krohn, 2008; Deighton, & Glazer, 1998).

Interaction of innovation management and supply chain management

Teams developed specifically for innovation purposes in organisations have been proven to produce good results (Formichelli, 1999). Interaction of innovation management and supply chain management offers dynamic profits to organisations if well implemented (Olmstead, 2002). Though this potential is far from being realised, research has shown the mentioned combination creates unique products and are characterised by the ability to coordinate technological developments (Cornellius, 2007; Psychogios, Szamosi, & Wood, 2010). The activities carried out are non-repetitive and are often performed in teams that are multi-disciplinary and well fitted with far reaching power. Properties of the product should be clear and the sales process in formal contracts to enable the staff to easily manage the sales.

Innovation is dependent on high levels of trust on the personnel from the management (Purcell, Kinnie, Rayton, and Swart, 2003). New innovations first priority should be to meet the customer’s demands at the same time satisfying that of the management. They should apply feasible and affordable technology to avoid extravagance while cutting costs. The most important capability for successful innovation lies with change management. Focus of organisations on critical capability growth for innovation companies can improve their position with consumers and partners in the supply chain. Another advantage would be the attainment of improvements in efficiency and sustainment of a competitive lead, in today’s dynamic business globe (Marketing Management: A Vital Topic. 2010; Poquette, 2009).

Creation of well developed programs enables companies to produce break through innovations that will cause profound improvements in their business performance. Interaction of innovation management and supply chain management is beneficial to various organisations, regardless what products or services they offer (Lewis, and Saunders, 2003).


When starting a business, risks are always calculated knowing that with fluctuations, economic decline, natural disasters just to name a few can lead to great losses. This is why people insure their businesses against some of these unwanted occurrences. I would say another method that can boost your profits and “insure” your business from downfall is definitely implementation of innovation management measures. Supply chain management can direct innovation management within its companies by applying the steps above and focus mostly on team work from the employees.

Outcomes of lower costs, better customer service, higher quality and management satisfaction are all addressed through innovation. Inventions are ever an evolutionary factor in life and revision of the existing innovations is always necessary. If this is done by an organisation profits will surely be realised not only in monetary forms but also in terms of company reputability and credibility. Interaction innovation without a doubt stand as an unquestionable profit based investment.

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