Supply chains have undergone an exorbitant amount of change over the last two years. A smooth-running and agile supply chain has proven to be what sets thriving organizations apart from their counterparts that have struggled to continue meeting customer demands during the disruption.
Table of contents
What Is an Agile Supply Chain?
An agile supply chain is one designed to be proactive in adjusting to significant changes in supply and demand. Agility isn’t a new concept. Supply chains have always experienced variabilities in supply and demand, which can arise due to anything from seasonal changes and holiday peaks to economic changes and product recalls.
However, in the last two years, the global pandemic, inflation and port congestion have markedly increased the amount of variation in disruption that supply chain leaders have experienced. Having an agile supply chain during this time enables fast and proactive adjustment to fluctuating supply and demand.
Why Is Supply Chain Agility Important?
Agility is not an optional characteristic of your supply chain because supply and demand are always changing, even in the most stable of environments. A static supply chain only works when all other variables remain static, which we know from experience is rarely the case.
With the recent market particularly, supply has had significant disruptions due to shifts in suppliers, port disruptions and the global pandemic. Demand has fluctuated as many organizations have shifted to direct-to-consumer and online business models, which are much more volatile by nature. A static supply chain is simply not equipped to handle these environmental changes at a fast enough rate for increasing customer demands.
With past supply and demand shifts, many supply chain leaders would respond by increasing the labor force to account for changes in the workload. However, with the recent labor market, this has not been an optimal solution, making agility in other areas of the supply chain even more critical.
Key Strategies for an Agile Supply Chain
An agile supply chain should not compete with having reliable and consistent processes within your operations. The more reliable and consistent your processes are and the better designed your supply chain is, the more agility your supply chain will have in responding to unforeseen shifts in supply and demand. Focusing on creating agility across your organization’s people, processes and technology will ensure you don’t miss any critical areas of the business when implementing agile strategies and practices.
People
While labor constraints have made it more difficult to address supply and demand shifts by hiring more people, workforce management is still an important area in the supply chain to create agility. Warehouse automation is one way that supply chain leaders are beginning to overcome workforce shortages and increase agility within the four walls. Automating processes to be completed more efficiently and account for variability will go a long way toward creating a more agile supply chain.
While increasing warehouse automation can reduce strain on the workforce, it is by no means meant to replace the workforce. Automation should exist to augment processes and increase efficiency in the way your existing workforce completes its tasks.
Processes
Creating agile processes throughout your distribution network is another important way to make your entire supply chain more agile. The key to ensuring process agility is to design and execute simple processes. If your normal business operating processes require significant management intervention and exception management to work effectively, that reduces your ability to adjust to different challenges. One way to simplify processes is to create a mix of fixed and variable capacity to allow shifts in seasonality or disruptions without constant exception management. Additionally, compressing cycle and lead times will help with reducing variability in how quickly you can get the product to the customer.
Technology
Consider implementing a supply chain execution system when working toward an agile supply chain. Each supply chain execution system can uniquely optimize operations and increase visibility within its area.
A transportation management system is a great tool for creating visibility into shipments and being more proactive about carriers for all modes.
A warehouse management system can accompany your automation tools as a way to optimize warehouse operations, including inventory management, labor distribution and picking, packing and shipping processes. All of these operations are critical to agility within the four walls.
A labor management system can mitigate any disruption that current labor conditions are putting on your workforce. Optimizing what your workforce is doing and when and how they are doing it will create agility and prevent delayed order fulfillment or improper staffing.
How enVista Can Help
Creating an agile supply chain is a complex endeavor. It requires taking a look at every area of your operations to see how they can be integrated and made more efficient so they can work together to proactively handle changes in supply and demand. enVista’s supply chain consulting team can analyze your supply chain network and determine what processes need support for maximum agility.
enVista’s software selection and implementation team can help you determine which supply chain execution systems would add the most value to your organization and go through the full implementation and go-live process with you. enVista’s automation team can analyze your facilities and determine where automation can augment your processes and empower your existing workforce.
If you’re ready to increase efficiency, improve competitive advantage and reduce cost with an agile supply chain, let’s have a conversation™.
