Saturday 18th Nov 2017 - Logistics Manager

Innovative disruption is here

A couple of months ago, at the European Supply Chain Excellence Awards, I predicted that in 2016 we would start to see more examples of disruptive innovation in the logistics market.

Malory Davies FCILT, Editor.

Malory Davies FCILT, Editor.

At the time, I did not expect that prediction to be fulfilled quite so fast. But last week DHL Supply Chain and Compass Group revealed that they had formed a partnership in the foodservice sector that would create “a major new disrupter in the market”.

DHL has been expanding its foodservice activities over the past couple of years. In 2014, it won a £30m contract with Virgin Trains to manage on-board catering services on the West Coast Main Line.

 It has been growing its business in the airline catering market and its customers now include United Airlines, and Sri Lankan Airlines as well as British Airways and Qantas. In an alternative to the traditional airline catering model, it uses specialist caterers to supply the food while it focuses on its logistics expertise.

And that is the thinking behind the deal with Compass. DHL will provide end-to-end supply chain solutions, overseeing the flow of product and management of waste. It will also bring its expertise in final mile operations, lean techniques and business analytics to create a platform for continuous improvement. Compass will use its supplier relationships and foodservices technology to drive the creation, sourcing, procurement and delivery of the menus.

The two companies argue that together they will create a new force in the foodservice market that will drive innovation, visibility and cost-competitiveness.

While this development focuses on the foodservice market, there are plenty of areas of operation that could be susceptible to disruptive innovators.

I’ve seen nothing to change my view that we can expect to see more organisations deciding that it is better to be the disrupter, not the disruptee.