October 24, 2016

Mix tradition with innovation - being bimodal lets you do both

Laban Sörén

Head of Retail Consulting, Tieto

The retail industry faces several forks in the road because of digitalisation, but no one really knows which path is the right one. So how can you manage to improve your traditional business models and supply chains while at the same time staying in front of innovation and new solutions? The answer is to create a bimodal supply chain strategy that lets your company compete on both fronts.

The bimodal model has quickly become a popular concept after it was introduced by Gartner as the way forward when it comes to both IT and supply chains. But many still don’t know how to make it work. The idea is to create possibilities to experiment with new innovations while simultaneously looking after and optimising existing processes. It’s about being able to handle two separate modes – one traditional (stable) and one innovative (agile) all under one umbrella.

In ”Mode 1,” a company focuses on stability, efficiency and constant improvements (operational excellence). The traditional flow must be continuously optimised, as the old business models still have an important role to play.

But we also have to realise that the landscape is changing faster than ever, and put ourselves in a position to take advantage of new opportunities that arise. That’s where “Mode 2” comes in. This one is about exploring the trends of tomorrow and having the courage to experiment with new solutions (innovation excellence). It can be anything from using drones to deliver packages to transporting goods with a convoy of self-driving trucks.

But that also means developing your supply chain in a different way.

The Internet of Things and artificial intelligence will create even bigger opportunities for innovative solutions, where the entire business model will have to be restructured from the ground up. It’s going to happen quickly, and supply chains must be able to keep up.

The key is to try several different things without fear of failure in Mode 2, and then having the capacity to industrialise those solutions that work and bringing them into Mode 1 with a stable supply chain.

At Tieto we have a deep understanding of digitalisation and how new technologies can be used to structure your organisation in a way that makes this blend work. We understand the challenges of today and the technology that drives the solutions of the future.

Our consultants and experts can give you more information on how to work in a bimodal way. Ask us during StrategiTorget Retail, October 25–26, at Yasuragi Hasseludden in Nacka, and we will be happy to tell you more.

Read more about Gartner’s insights about the bimodal supply chain.

 

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