In the U.S., stock prices and market valuation depend on a company’s ability to bring innovation to the market.  Many U.S. companies are good with product innovation; however, they sometimes struggle to commercialize it effectively.

Case examples:

• Boeing 787 is expected to completely change commercial aviation due to improvements in fuel efficiency, ergonomic design, and passenger comfort.  The launch was delayed by 2 years for various supply chain challenges. Boeing lost 70 orders (as of Dec 2009) and valuable advantage versus its competition
   
• A leading retailer lost significant market share because of its long supply chain and failure to deliver the latest fashion products on time

Concept of mass customization has resulted in increased supply chain complexity by increasing the mix and reducing volume per variation.  Additionally, companies are manufacturing their products in low cost countries to take advantage of lower factor costs.

These changes are creating tremendous pressures on supply chain -- increasing cycle time, cost, inventory levels, etc.  There is a need for supply chain to be flexible to respond to market changes quickly.

Lack of supply chain flexibility can result in:

• Missed launch timing, product quality issues, etc.
   
• Missed deliveries, high inventory and obsolescence
   
• Lower customer satisfaction and poor perception of a company’s products or services