Reverse Innovation and Supply Chain

Think Supply Chain - Jason WheelerSharon Rice: I’m pleased to welcome guest blogger Jason Wheeler, CPIM, CSCP, to “Think Supply Chain.” Wheeler is Process Improvement Engineer, Warehouse Operations for Roche Diagnostics Operations and the APICS chair-elect.

I recently heard the term “reverse innovation” used during a discussion at work. Not being familiar with the concept, I quickly did a little research to find out more about it. The broad definition means goods are developed as inexpensive models to meet the needs of developing nations and, then, repackaged as low-cost innovative goods for Western buyers.

Wanting to learn more, I began looking for articles or a book that could provide more insight on the topic. A quick search brought up “Reverse Innovation: Create Far From Home, Win Everywhere,” written by two Dartmouth professors, Vijay Govindarajan and Chris Trimble. The book provides a better understanding of the concept while also discussing why large corporations have struggled with this idea.

Using the reverse innovation mindset, GE designed a portable, low-cost ultrasound machine that could be used in rural China. That same product now is used in many ambulances right here in the United States. GE went on to use the same process to design a low-cost portable electrocardiogram (ECG) unit for rural India. After the initial unit was completed, GE designed additional products with some minor enhancements. Similar to the portable ultrasounds, visiting nurses and primary care doctors are able to use the ECG units at rural clinics that could not afford the high-end units.

Where are some other areas where reverse innovation might be put to use? How might it be applied to improve supply chain and operations management?

3 thoughts on “Reverse Innovation and Supply Chain

  1. Reverse Innovation is an excellent point. I have not come across in my readings any related to supply chain. There are lots of publications that talk about, how the poor infrastructure in emerging economies is disruptive to supply chains. Hence it’s hard to imagine reverse innovation in supply chain.
    However in the midst of the poor infrastructure there is one example that clearly stands out as an inspiration for reverse innovation.
    It’s the Mumbai Dabbawala System. It’s an organization that picks up and delivers middle class Indian home cooked food in lunch boxes, and then the very same day returns the empty lunch box to their homes. Here are some facts from this organization that should inspire reverse innovation
    Company Started: 1890
    Delivery Area: 24 Sq Miles
    Technology: Last major upgrade 125 years old – use of bicycles for delivery + plus regular public transportation (overcrowded Indian railways)
    Organization: Flat and Entrepreneurial
    Complexity: 200,000 Deliveries / 400,000 transactions daily
    Error Rate: 1 in 16 Million (better than 6 sigma)
    Carbon Footprint: Almost ZERO (use bicycles) + Public Transport
    Innovation: Multi-Level Code System developed by uneducated, illiterate people

    May be one day we will have something inspired from this similar in Silicon Valley or the big apple!

  2. This question is for Mr Jason Wheeler who engineer’s process improvement at Roche: Hi Jason, I was involved in the labelling process at Roche DeeWhy Warehouse (Building 29 to be precise) where several pallet loads of small piece of imported equipments are labelled taking several man hours/days. I personally thought you can apply reverse innovation in this context to overcome this monotonous process. Appreciate your comment on this. Thanks, Kumar Lakshmanaswamy

    • Kumar, I agree that there could be some improvements made to that process using the reverse innovation methodology. Have you reached out to the supplier in effort to collaborate on the issue?

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