How Agile is Your Supply Chain?

The term agile is used today to describe many corporate tasks, including the way in which employees complete their to-do lists. In general, it means “readiness to change.” From a Supply Chain perspective, agility entails the ability to respond quickly to a switch in demand in a volatile market place. It’s all about having an ear to the market and being hyper aware of sensitivities and fluctuations, and be able to respond with speed and flexibility.

Agile vs. Lean

Many people present the concept of agile supply chain management versus a lean supply chain strategy, because they’re basically opposites in approach. A few years back, lean supply chain management was considered the golden standard, as it basically cut costs and resources around operations it deemed “trimmable.” Today, the tide has turned and now the more investments and systems that connect and provide insights, the better. Agile supply chains are able to deliver thanks to real-time insights about customers demands, which would not be known in a lean system.

It’s not necessarily that agile is better than lean, because it truly depends on the industry and product. For example, the food industry requires an incredibly agile supply chain because it deals with items that have a short shelf life. Inventories need to be updated within seconds and new requests filled more frequently than with most other industries.

The Cornerstones of Agility

In order to consider a supply chain agile, the following principles must be true and applied every time:

Speed: when you think of agile, think of a predator catching a prey. This is the sense of urgency many companies feel to fill shelves, stock store racks, or bring a new product to the market. They know that the insights on customer needs can change at any point, so they need to move quickly and with certainty.

Flexibility: an agile supply chain might have its operations revised mid project, and they need to be ok with it. Things chance at the blink of an eye, and if you have an agile team in place, they should be quick to adapt to the new conditions without missing a beat.

Cost efficient: because agility is all about change, the idea is to waste as little resources as possible on the parts of the system you can control. Your investments in technology are completely necessary in order to have real-time insights, and they can also add up quickly, so the rest of the operation needs to work like a well-oiled machine with zero waste.

What’s your score?

With all of this in mind, where on the chart does your company land? Agile, or lean? If you’re unsure about where you are or where you should be, you’re not alone. Many customers find themselves in your spot, but the solution is pretty easy: contact us, and we’ll share with you our expertise and recommendations for your supply chain optimization.