Agile Supply Chain: Importance in changing conditions
The term ‘Agility’ refers to ‘the ability to move quickly and easily’. That idea of quick and easy moment translates well in the business, especially in supply chain management. An Agile supply chain strategy focuses on being responsive and flexible to changing customer demands while simultaneously maintaining a high rate of productivity. This strategy should be used when both supply and demand uncertainty is high.
Agile Supply Chain Strategy involves key associations:
- Relationships – Due to the high level of uncertainty and situations that require agile supply chain strategies, organizations need to form relationships with each other, to help, manage or reduce supply and demand uncertainty
- Sensitivity – Here, sensitivity does not mean personal feelings and emotions. It means being alert and being able to quickly identify the changing market conditions and act accordingly
- Process – Supply Chain Agility can be enhanced by innovative processes like postponement activities can reduce lead time and increase responsiveness under uncertain demand conditions without increasing costs and capacity
- Information – Information is particularly important in Agile Supply Chain. Supply chain partners rely on a high degree of information sharing, which requires a high degree of connectivity and being virtually integrated. Information related to changing market insights and changing statuses can be very crucial for supply chain partners which will also help them plan a strategy accordingly
- Flexibility – It is the essence of agile supply chain strategy. People and processes need to quickly change and respond to the changing demand and supply conditions. Technology platform should be intelligent enough to proactively infer and be agile enough to responsively adapt to the changes. Pandemic has been the most uncertain event this year and it has led to an unexpected change in demand and supply. Hence, an agile supply chain strategy requires flexibility in these uncertain times
Importance of Agile Supply Chain
Increasing customer expectations, global business challenges and digitization are greatly impacting how we market and sell our products and provide a high-level customer experience through the supply chain. And agility is critical to sustaining business success. The current market situation can be called a time-based competition era, where supply chains compete to provide goods and services in a shorter time while remaining cost-effective. Agility is a proper answer to the new market conditions. It should also be noted that different supply chains provide different products and services with different characteristics. It is vital for the success of any supply chain to distinguish between products and adopt suitable approaches.