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ten years. Technological innovations often lead to manufacturing new products
or services, whereas “soft” innovations focus on organizational and management
issues: to improve the organizational structures, tailor the services to the
customer’s requirements, extend the sales networks, improve the orders and
distribution system, financing methods, etc.
Due to the nature of the supply chain logistics and management, the impact
of improvements on the functioning of individual enterprises, supply chains or
even the whole industry should be analysed. The type of implemented changes
will affect the period after which effects can be seen. D.W. Allvine and T. Gore
have divided the solutions implemented in supply chains into four groups:
“quick hits”, short-term, medium-term and long-term 7 (see Table 16).
Table 16. Types of innovative projects depending on the type and scope of required changes
Improvement
project
Quick hit 1-6 months
Short-term
Duration Characteristics
Less than
6 months
Medium-term 6-18 months
Long-term
More than 12
months
Provides immediate benefits. Includes simple changes in a process
or policy of the company and is easy to implement. Can also be a
temporary solution put in place until larger, more strategic improvements
can be implemented.
May refer to pilot efforts identified in the supply chain diagnostic.
Often includes process, policy and organisation changes. May also
include minor technology enhancements.
Often consists of significant organizational change of one or more
key supply chain components. Can include additional rollouts of
piloted efforts and large-scale technology improvements.
Strategic and large in nature. Often includes changing the way an
organisation approaches the supply chain. Can be the large-scale
change that allows organizations to maximize their supply chain
and differentiate themselves from their competitors.
Source: Gower handbook of supply chain management. Edited by J. Gattorna, R. Ogulin, M.W. Reynolds. Gower
Publishing, Ltd., Aldershot 2003, p. 117.
Innovation is a necessity for logistics companies serving “new economy”
markets. Certain conditions in terms of technology, knowledge and relations in
the chain must be fulfilled if companies are to be innovative 8 . Knowledge is an
important element in the flow of materials, information and services for the
needs of logistics. The amount of data and information in the economy of today
is enormous, and companies have to transform it into knowledge and action to
effectively implement innovations. In order to improve their market position, logistic
companies will have to catch up with the progress in information and
7 Gower handbook of supply chain management. Edited by J. Gattorna, R. Ogulin, M.W. Reynolds.
Gower Publishing, Ltd., Aldershot 2003, p. 117.
8 J. Kandampully, Innovation as the core competency of a service organisation: the role of technology,
knowledge and networks. “European Journal of Innovation Management” 2002, Vol. 5 No. 1.
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