Scm Innovation at Kraft Foods

Kraft Foods Applies Product Innovation Concepts To Supply Chain Processes

Global Logistics & Supply Chain Strategies | December 18, 2007

Kraft Foods wanted to more closely collaborate with its customers and involve them as co-designers of supply chain value. To accomplish this, it turned to proven concepts from the world of product innovation and design.

Supply chain managers at Kraft Foods had identified a goal that they believed would lead to competitive advantage: actively involve customers as “value creation co-designers.” They envisioned a new culture based on enhanced collaboration and innovation that would drive step changes in targeted supply chain processes.

The question was how to make this vision a reality. Ron Volpe, vice president-supply chain, and others on the Kraft supply chain team, decided to borrow from the world of product innovation. They reasoned that the models companies follow to innovate through product design also could be applied to process design.

To test that theory, Kraft in 2002 approached global design and innovation firm IDEO, Palo Alto, Calif. IDEO, a leader in design and product innovation, was ranked #15 in the Boston Consulting Group’s 2006 list of the world’s 25 most innovative companies.

The timing was fortunate because IDEO was in the early stages of its Transformation by Design practice, which it created specifically to help companies enhance innovation by re-inventing their cultures. Kraft became an early client of the IDEO transformation team. “Kraft Supply Chain specifically contracted IDEO to explore the concept of culture change driving enhanced collaboration (and, in turn) driving process improvement and innovation,” says Volpe.

During the first year of the contract, Kraft Supply Chain immersed roughly 120 of its North American managers in a workshop entitled IDEO U. The workshop gave participants a short but intense “deep dive” into the concepts that IDEO uses to help companies change. “The primary...