Design Thinking — engineering a better supply chain

Supply Change

Episode 3: Design Thinking — engineering a better supply chain

Episode three is all about design thinking. Roy Anderson interviews Ron Volpe to go deep into what design thinking is and how it applies to the supply chain.

So, what is “Design Thinking?” And how does it fit in with the supply chain?

To understand the role of design thinking in the supply chain, you first have to recognize that in business, “the road is littered with products and services that nobody needs.” And often the reason those products failed is because the creators were designing the products based on what they thought the market wanted, rather than what the people actually wanted to buy.

Design thinking is about designing products, services and processes, always with the end-user in mind. When you apply design thinking to the supply chain, you have to think of every stage of the process, from “farm to table.” And your ultimate objective has to be designing it for the end user.

Is the process of design thinking a quick exercise or a long term process?

Generally, there are three steps for crafting a solution with design thinking: empathy, ideation, and experimentation.

So when you apply design thinking to the supply chain, rather than thinking, “well, this is what we think somebody wants, and this is how we think the supply chain would work,” you can do something called “walking the supply chain.” That means going from a manufacturing plant to a distribution center to a store so you can understand the full journey of each product.

Understanding that supply chain journey helps build empathy around both what your customers and partners are looking for. And even more importantly, it gives you a better understanding of how your end users are using your product.

Another way to gain insights is through analogous observations. That means finding industries that have unique forecasting challenges, visiting a company in that industry, and looking for analogous processes that you could take back into your own organization.

One example is with the forecasting challenges on short shelf-life products. So consider the Los Angeles Times. If you think about newspapers, once they make the number of newspapers they’re going to make, that's it, they either sell them or they don't sell them. So understanding how many papers to circulate and where to distribute them is really critical. If you’re in a completely different industry than newspapers, but still have challenges forecasting short shelf-life products, then understanding how the Los Angeles Times manages the challenge in forecasting might be something you’d want to adopt.

**How do you apply what you’ve learned from other industries to your own? **

Every workshop should have a challenge statement, and every analogous observation should be built and designed to relate to your particular challenge statement. It forces you to seek out the tools and craft to build a sustainable supply chain rather than just focusing on the product you’re selling.

Supply chain people want to learn more about supply chain innovations. And learning from other industries becomes not just a way to learn more, but it becomes a way to develop alliances with other industries and companies.

People love the workshops and analogous observations. You get the excitement of learning new ideas and getting inspired by other industry innovations.

But the challenge is taking your learnings, developing prototypes, and committing to agree on the things you’re going to do in the next 30 days to pilot your learnings. The hard work is continuing to have your teams together focusing on those changes after the really exciting workshop.

One way to do that is to create teams from both companies to keep the relationship alive and manage the creation of those ideas over an entire year. Carrying it forward for a year requires stamina and buy-in and a dedication to see it through.

Is it difficult to keep the good ideas in practice without losing momentum?

The critical component is getting senior leadership to buy-in. Without senior leadership buy-in from both organizations, you’re not going to get momentum to finish the task. The reality is senior leadership for both organizations need to agree and commit to saying, “I'm in it for the long haul.” Because if they’re not, it’s just a fun exercise to do for two or three days.

The greatest buy-in you get is when you’re able to launch new ideas faster than you would in any other way. And the second boost in buy-in is when your solutions that you’re generating are more innovative solutions.

So how does someone like a chief supply chain officer really benefit from a design thinking process?

One benefit is to develop new ideas, get them launched faster, and drive innovation within the supply chain. The other benefit that comes out of this is that the relationship is infinitely better between the two organizations working together.

You should be able to answer: who's the end consumer you’re designing for? Why is it better if that person ends up with a better product and a better process, and how can you work together to make this a deliverable?

Start thinking about designing your supply chain as if your supply chain was an end-user product. If you think about designing for your end user, you start thinking differently about your relationship with the supply chain.

What’s the biggest concern for people thinking about implementing design thinking?

Design thinking has a messy aspect to it, and finance doesn’t want to be messy. It's sometimes a little harder to get the finance team to get outside of the box and be okay with the fact that you’re going to fail fast so you can succeed faster. It's certainly good to recognize that the way a finance team approaches this kind of process might be slightly different, but it's still very valuable to have finance as a part of the process.

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