Three Questions to Consider Before Collaborating on Supply Chain Innovations

As supply chain professionals look for solutions to solve their biggest operational headaches — inflation, sustainability costs and labor shortages, just to name a few — they’re increasingly willing to spend big on innovation to reduce costs elsewhere.

Kenco’s 2025 Supply Chain Innovation Survey found that one in four professionals now have $500,000 or more in their budget to incorporate new tools and technologies, and 39% have seen their budgets increase this year. They’re exploring a variety of solutions, including robotics (43%), sensors and automatic identification (40%) and 3D printing (40%). And, of course, 41% are going all in on artificial intelligence-powered technologies.

However, investing the money in a new solution doesn’t instantly mean a productivity increase. The journey is as important as the destination, and how supply chain professionals work with external partners throughout implementation will determine how well the technology improves operations. Fifty-seven percent of respondents said they’re working with a third-party logistics provider, outside consultant or both on adopting potential technologies, so it’s important that supply chain managers understand how to get the relationship off on the right foot.

Following are three questions that managers should be able to answer before selecting an external partner, so that their technology adoption moves as smoothly as possible.

What’s the underlying issue? At the macro level, supply chain managers can usually identify the need for new technology quickly — throughput is lagging, too many chargebacks are occurring, etc. Implementing shiny new robots or an AI application may seem like the answer to cutting down on errors.

Beginning a search with a macro outcome in mind, though, can often lead to a bumpy implementation, and even impact how well the solution improves productivity or reduces errors. Before selecting a technology and an implementation partner, managers should spend time exploring every function that could contribute to the macro pain point, and diagnose the underlying issue.

For example, a decrease in throughput could be the result of undertrained employees, suboptimal warehouse layout, mismatches in SKU location with system records, or even unreadable barcodes. Each of these micro-level pain points can be addressed by a different technology, and warehouse management needs to identify which of these issues is occurring enough to warrant deeper investment. This approach will lead to better conversations with potential external partners, and a better understanding of how the chosen technology will improve operations.

What’s my appetite for trial and error? Supply chain tradeshows are filled to the brim with cutting-edge technologies, all of which promise to change the way goods move — from autonomous forklifts moving massive boxes around the show floor, to drones picking from shelves stacked five stories high. It’s easy for managers to envision what that solution might look like in their warehouse. But every facility is different, with varying layouts and constraints, and it’s unlikely that implementation plans will unfold exactly, or even nearly, as planned.

As managers engage in conversations with potential external partners, they should have an honest conversation with senior leadership, and come away with a good understanding of their tolerance for experimentation. This means setting achievable objectives at the micro level, clear goals and a timeline for achieving them at the macro level, and leaving breathing room for adjustments along the way. Voice and vision tech will need to be fine-tuned to a warehouse’s unique layout, drone cameras adjusted to ensure they’re reading SKU information accurately, and autonomous devices programmed to move safely and swiftly between aisles. 

Managers and external partners will almost certainly encounter hiccups while rolling out new tech, and might even have to take plans back to the drawing board. An iterative approach with built-in risk mitigation will serve everyone well. As long as all parties are on the same page about potential setbacks, the external partner will have the space they need to configure their technology properly.

What does continuous improvement look like? The supply chain may have an end at the store shelf or customer’s doorstep, but supply chain innovation is a circle. Managers will spend months or even years implementing a new technology, with great expectations for operational improvements. The collaboration continues on from evaluation, with both managers and partners reviewing the go-live process, diving into the micro-efficiencies gained, and understanding where the technology met, exceeded or fell short of macro goals.

Because service after sale differs from external partner to external partner — and some may leave ownership up to the supply chain manager entirely — it’s important to understand what the relationship will look like moving forward. How often will each side re-evaluate the technology to ensure it’s working as needed? How will future goals be set? How will the collaborators share lessons to ensure that the technology only improves with time? And, in the event the collaboration results in a new solution, who owns the rights to that technology? Laying out expectations for ongoing support and collaboration will be key to ensuring both sides are aligned through implementation and beyond.

When supply chain managers invest in a new technology, they’re not only buying the nuts and bolts; they’re buying a relationship with the external partner. They’re looking for someone who can analyze their operations at a micro level, adjust the technology as needed for their unique constraints, and continue delivering value year after year.

Managers looking to spend their innovation budgets should take the time to develop answers to these three questions as they begin their search. Having clear expectations of what problem will be solved, what results should be achieved, how much time it will take to get there and what ongoing support will look like will lead to more fruitful conversations with outside partners — and, ultimately, a smoother implementation.

Kristi Montgomery is vice president, innovation, research & development at Kenco.