At the recent IMHX exhibition and conference in Birmingham, United Kingdom, Ti’s CEO, Professor John Manners-Bell, chaired a panel discussing the issues surrounding supply chain start-ups and innovation in the sector. Participating in the session were Mark Parsons, Chainview Consulting, Ken Lyon, a member of Ti’s advisory board and Jonah McIntire, CEO of TNX Logistics, a procure-to-pay road transport platform.
The discussion of the panel was wide-ranging, covering topics such as the attributes which make a good start-up; the impact of disruptors on the market incumbents and examining the fundamental differences between those start-ups which are potential disruptors and those which create efficiencies through process innovation.
The panellists started by looking at the issue of funding. According to Mark Parsons, very different attitudes to investment in start-ups exist throughout the world. In the US, for example, early stage start-ups find it easier to access investment compared with more risk averse UK and Europe. However, this increased willingness to invest comes at the price of a greater share of equity. McIntire commented that many investors are unwilling to take a risk if a start-up doesn’t conform to certain characteristics and most unduly focus their resources on those which can scale up rapidly. Lyon agreed that many investors exhibited a herd mentality, determined to bet on companies which resemble successful forerunners rather than risk investment in start-ups with novel business models or technologies. As investors stampede towards identikit start-ups, sectors become overhyped which in turn results in disappointment.
When asked about the future of the market incumbents, the panellists considered that the sector was not immune to company failure. Large corporations are good at incremental change, however they struggle with paradigm shift for a whole set of reasons, not least internal politics. Corporates can take a long time to make decisions or take action which in the present fast-paced technological environment can mean that they miss opportunities seized by smaller competitors. Whilst many large logistics companies have benefited from engaging with innovators, such as TNX Logistics, in terms of making processes more efficient, more fundamental issues will arise when they face existential challenges such as increasing levels of automation in the warehouse or autonomous trucks.
The panel agreed that the threat of a supply chain and logistics ‘Thomas Cook’ was very real. The bankrupt travel company should be a warning to many in the sector that sometimes incremental change is not enough when the entire market has shifted.
Source: Transport Intelligence, September 30, 2019
Author: Transport Intelligence