Bringing Exponential Organization Power to Supply Chains

November 30th, 2017

Small, networking companies attain stunning growth by harnessing technological innovation. Now supply chain operators seek to follow their revolutionary example.

The rapid advance of digital technology has not only produced new capabilities of working and living, but is also challenging the very organization and operation of companies, sectors and entire economies. That disruption is led by so-called exponential organizations, whose spectacular growth of business and value contrasts their relative simplicity and size. Now, the stunning success of those maturing start-ups is inspiring traditional companies to completely re-conceptualize paradigms – a reaction revolutionizing supply chains, too.

Examples of such organizations expanding at double- or triple-digit rates include AirBnB, Amazon, BlaBlaCar and Facebook, whose worldwide reach and astonishing growth are often inverse to their limited size. They also represent a mirror image to legacy companies, whose international expansion came through owning and operating as many aspects of their activity as possible.

Rather than possessing fleets of rental cars, hundreds of hotels or thousands of global staffers to keep expanding, these new companies identify external abundance, under-used assets and unanswered demand. They then create entirely new markets by harnessing those with outside partners.

"The key is finding abundance, market openings and ways to use technological advances to take an idea from zero to 100 quickly -- and continue growing with constant innovation and improvement," explains Yacine Founaqa, Innovation Manager for B. Lab, the Bolloré Group's digital innovation community. Launched in 2016, B. Lab identifies new products, services and processes that can be created amid the digital revolution, promotes those throughout the Bolloré Group and federates collaborators around the innovation drive.

B. Lab's analyses of exponential organizations – and their application to legacy businesses – are part of that effort.

"Contrary to established companies, exponential organizations don't make one thing and keep selling it over and over, but continuously focus on, innovate and improve their product, both internally and via new partners," Mr. Founaqa notes. "Assets they do own cost them as much whether they have one or 100 customers. So their objective is to maximize those assets to magnify business and income for all partners."

Uber bringing ride-searching passengers and drivers together, or AirBnB's apartment renting service are good examples. Now similar strategies are arising within supply chains, too.

To resolve last kilometer complications, for example, some delivery services now pay small businesses a fee to hold goods customers collect at their convenience. Others have taken inspiration from the ride sharing activities of BlaBlaCar, and remunerate drivers to also use their empty trunk space to transport deliveries to mutual destinations.

"This requires companies to think like start-ups, and rely on technology to make business work," says Mr. Founaqa. "But it also poses major challenges to established companies, because all aspects of operation must be reconsidered, challenged and often totally changed. That's a huge undertaking requiring commitment and support of everyone involved.'

Such adaptation is already at work elsewhere in traditional supply chains. For example, Bolloré Logistics at times uses outside solutions for transport and delivery complications in remote parts of Africa. Drivers of regular bus services may take packages from large towns to remote locales transited, and confide parcels to local contacts for delivery or holding for customer collection.

By contrast, Bolloré Logistics has introduced around 50 Bluedistrib' secure locker facilities in and around Paris. Stored in Bluedistrib' venues closest to customers' home address, parcels are retrieved at clients' convenience – innovation eliminating delivery-timing complications, and reducing driver CO2 production.

"That's one manner of internally using the thinking, organization and structures similar to those that make exponential organizations so successful," Mr. Founaqa says. "The goal is to extend that in multiple, free-moving fashion across an entire block supply chain using all logistics and transport assets and partners involved–with all connected and driven by data-sharing and –analyzing technologies."

Key Figures
  • 20%

    More fuel-efficient for the Boeing 787 and the Airbus A350

  • 70%

    of Urbanisation is expected by 2050

  • 27

    mega-cities are expected by 2050, with at least 10 million people, compared to 1...

  • +18,4%

    of growth for E-commerce retail market in Europe in 2015

  • 82%

    of goods are moved by road

  • 1 billion

    Population in Africa

  • 60%

    of Africa’s population will be urbanized by 2050

  • 7,5%

    of growth for Indian GDP in 2014

  • 4,9%

    of growth for African GDP in 2016

  • 6,1%

    of growth for East Asian GDP in 2015, the world’s fastest-growing region

  • 19 224 teus

    transported by the MSC Oscar, the largest container ship in the world

  • 396 m

    is the size of the MSC Oscar ship

  • 120 h

    is the Non-Stop Flight Record done by Solar Impulse

  • 4,5%

    of growth in 2015 for Global Airfreight demand