How Disruption Is Changing Industries (Like the Supply Chain)

There’s a lot of talk about how certain companies and technologies are disrupting the business landscape. Disruption of this kind can come in many forms. It can be something relatively small that only impacts one highly specific industry. Or, it can be wide and sweeping, affecting nearly every enterprise on Earth.

Let’s take a closer look at disruption in general and how it is changing industries, like the supply chain, as we know it.

What Does Disruption Mean for Businesses?

The Harvard Business Review created a 2×2 matrix to help business owners, entrepreneurs, and other industry experts better understand disruption. The matrix is divided into four quadrants:

1 Current level of disruption (0-1)

Viability Volatility
Durability Vulnerability

0 Susceptibility to Future Disruption (0-1)           1

Each of these quadrants is based on two axes that range from zero to one: current level of disruption and susceptibility to disruption.

Businesses with lower scores on each are legacy brands and in industries with large barriers to entry. These are those considered durable. On the flip side, there are organizations that have faced a lot of disruption in the present and will likely have to face much more going forward. Hotels are a great example of this — as new services such as Airbnb have turned the hospitality industry on its head.

Further, viable companies are those that have faced disruption but are making necessary pivots, while vulnerable companies are in a state where lots of disruption is on the horizon. Insurance and healthcare are two prime examples of industries vulnerable to disruption.

How Can Your Business Stay Ahead of Disruption?

We all saw how video rental stores such as Blockbuster were put to the curb by Netflix. Disruption can happen to any business, which is why it’s so essential for executives today to be looking forward. Of course, using tools like the HBR’s matrix can be helpful. But the reality is that disruption is becoming harder to predict for a few reasons.

Research firm Deloitte released an extensive report called “Patterns of Disruption.” In it, they help to clarify why disruption can be so hard to see coming, even in instances when it seems completely obvious in hindsight.

One driving reason is the fact that not all disruption looks the same. Every market is different. Some only have a few players, while others are split among dozens or more. Due to this, the way disruption occurs in one industry isn’t going to be facsimile to when it happens somewhere else. The rise of technology is also playing a major role in this shift. Modern tech is spurring an unprecedented level of growth, which in turn is disrupting legacy enterprises.

Top Areas for Disruption in the Supply Chain

The supply chain is one industry that’s certainly not immune from disruption. Innovation, greater competition, and globalization are all factors that affect disruption in this sphere. It’s becoming increasingly clear organizations need to stay ahead of this by employing supply chain analytics. Platforms such as ThoughtSpot provide AI-enabled analytics that empower businesses to drill into their data in new ways. The ability for lay employees to run ad hoc analyses makes it so organizations can be more agile in responding to threats of disruption.

When it comes to disruption, it’s tough to argue that any single organization has had a greater impact than Amazon. This behemoth has touched a wide variety of industries, and has already disrupted the supply chain in a big way. Not that long ago, next-day or same-day shipping would have been an incredibly expensive luxury. Now, Amazon has turned it into an expectation of consumers. This is forcing those who work in supply chains and logistics to scramble to find new ways to compete.

Disruption is almost always a good thing for consumers. But on the business side, you need to ensure your organization stays ahead of this fray. Otherwise, it might just become irrelevant.