Supply chains have undergone an exorbitant amount of change in the last decade. A smooth-running and agile supply chain has proven to be what sets thriving organisations apart from their counterparts that struggle to continue meeting customer demands during disruption.
What Is an Agile Supply Chain?
An agile supply chain proactively adjusts to significant changes in supply and demand. Supply chain agility improves several key business areas, including flexibility and adaptability, responsiveness and customer focus.
Agility isn’t a new concept. Supply chains have always experienced variabilities in supply and demand as a result of anything from seasonal changes and holiday peaks to economic changes and product recalls.
The global pandemic, worldwide instability, inflation and port congestion are a few factors that markedly increased the amount of variation in disruptions that supply chain leaders experience.
Why Is Supply Chain Agility Important?
Supply chain agility isn’t optional; it’s essential in a market characterised by constantly changing supply and demand. Companies that invest wisely in supply chain agility are better situated to surpass customer expectations for faster deliveries and optimise costs through savvy inventory management. It also gives companies an advantage when dealing with shocks from wide-ranging global events, navigating trade tensions and managing setbacks from diverse disruptions
Static supply chains only work when all other variables remain static, which rarely happens. They aren’t equipped to handle environmental changes, evolving business models and global disruptions fast enough to meet increasing customer demands.
In the past, many supply chain leaders have responded to supply and demand shifts by increasing the labour force to account for changes in the workload. However, with the recent labour market, this hasn’t 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 shouldn’t compete with having reliable and consistent processes within your operations. The more consistent and dependable your processes are and the better designed your supply chain is, the more agile your supply chain will be in responding to unforeseen shifts in supply and demand.
Focusing on creating agility across your organisation’s people, processes and technology can ensure you don’t miss any critical areas of the business when implementing agile strategies and practices.
People
Agility starts with the workforce. Teams that are comfortable with changes, embrace continuous learning, welcome cross-functional collaboration and value empowered decision-making can help organisations implement agile supply chains faster and more effectively.
Staff members are crucial for a successful pivot from static to agile supply chain systems. Timely training on emerging technologies and agile methodologies helps staff remain adaptable and up to speed in unpredictable markets.
Warehouse automation is one way that supply chain leaders are increasing agility while also overcoming workforce shortages. Automating processes to be completed more efficiently and accounting for variability helps create a more agile supply chain.
While increasing warehouse automation can reduce strain on the workforce, it isn’t meant to replace employees. Automation should augment processes and increase efficiency within the existing workforce.
Processes
Creating agile processes throughout your distribution network ensures the agility of your entire supply chain. The key to ensuring process agility is designing and executing simple processes. If your normal business operations require significant management intervention and exception management to work effectively, it reduces your ability to adjust to 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. Compressing cycle and lead times can also help reduce variability in how quickly you can get the product to the customer.
Technology
Digital transformation accelerates supply chain agility. Tools such as AI-driven demand forecasting, IoT-enabled inventory tracking and cloud-based supply chain execution systems provide actionable insights. For example, automation in warehousing and transportation reduces lead times and improves visibility across the supply chain.
When working toward an agile supply chain, consider implementing a supply chain execution system. Each supply chain execution system can optimise operations and increase visibility within its area. For example:
- A transportation management system is a valuable tool for creating visibility into shipments and helps you be more proactive about carriers for all modes.
- A warehouse management system can accompany your automation tools to optimise warehouse operations, including inventory management, labour distribution and picking, packing and shipping processes. These operations are critical to agility within the four walls.
- A labour management system can mitigate disruptions labour conditions put on the workforce. Optimising what your workforce is doing, and when and how they’re doing it, can create agility and prevent delayed order fulfilment or improper staffing.
Benefits of Supply Chain Agility
Achieving supply chain agility has many measurable benefits, including:
- Improved responsiveness to customer demands
- Lower inventory costs and minimised waste through smarter, more accurate forecasting
- Reduced back orders and stock unavailability
- Enhanced collaboration with suppliers and partners
- Reduced lead times for greater customer satisfaction
- Greater resilience against global disruptions
- Greater ability to respond rapidly to sudden market changes
- Improved supply chain visibility
Best Practices to Achieve Agility
Organisations can foster agility in the supply chain by:
- Leveraging real-time data through machine learning and AI for fast decision-making.
- Diversifying supplier networks to mitigate risk and encouraging vendor collaborations for future-forward partnerships.
- Implementing demand-driven planning instead of relying solely on forecasts.
- Investing in automation technologies to eliminate bottlenecks, reduce errors and relieve staff members for more strategic tasks.
- Prioritising employee training and encouraging empowered decision-making for agility acceptance.
- Adopting a customer-first mindset throughout the supply chain.
How enVista Can Help
Creating an agile supply chain is a complex endeavor. It requires examining 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 analyse your supply chain network and determine what processes need support for maximum agility.
Our software selection and implementation team can help you determine which supply chain execution systems would add the most value to your organisation and guide you through the full implementation and go-live process. enVista’s automation team can analyse 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®.
