Agile Supply Chain Explained
Introduction
The term “agile supply chain” means just what it sounds like: the ability to move quickly and adapt to rapidly shifting consumer demands. Supply chain agility typically is applied to the operations and planning realm of supply chain disciplines. Traditional methods of supply chain involved warehousing and stocking large amounts of anticipated goods. As more companies adopt agile supply chain tactics and technologies, the necessary skill-sets, technological savvy, and efficiencies of the workforce have to rapidly adapt as well. This creates a lot of challenges for employers looking to deploy these efficiencies as talent shortages continue to plague supply chain. Will they turn to the gig economy until the talent pipeline catches up?
What Is Agile Supply Chain
Agile supply chains move these planning capabilities to a “just in time” model of supplying consumers. These tactics focus more on flexibility and responsiveness to changing consumer demands.
According to Oracle, there are 5 main qualities that make a supply chain organization agile:
- Accessibility: Real time data about demand is easily accessible. In addition to demand, organizations create heightened transparency around inventory, production, logistics and other peripheral activities related to manufacturing and delivery of product.
- Alertness: Vigilance around any relevant shifts. Things like changes in global markets, supply, demand, risks and opportunities. Risks involved would be out of stock items, etc.
- Decisiveness: Quickly making informed decisions based on available data. An agile decision making process, if you will.
- Flexibility: Able to shift operations in response to a variety of decisions such as the need to surge production based on spike in demand or to shift production lines due to a sudden material shortage.
- Swiftness: Swiftness encompasses the speed and efficiency with which a supply chain can adjust its operations, reconfigure processes, and mobilize resources to maintain smooth and continuous service, ensuring that customer needs are met promptly and effectively.
Pandemic Influenced Changes
The Pandemic created a greater emphasis on inventory planning and better consumer demand forecasting. Along with this came an increase in technologies that provided more real time agility in things like production and manufacturing schedules. An Ernst & Young survey of senior supply chain executives revealed a desire for significant technology investments as most of them were negatively impacted by Covid19 disruptions. Adjustments like SKU rationalization rather than more manual tactics helped build more advanced analytics for inventory control. A tactic born of need created a more agile supply chain that is being continued in the absence of disruption as a cost saving measure of efficiency.
Employers desired a greater degree of visibility, efficiency, and resilience across their end to end supply chains. Technology is the only way to achieve these outcomes in the required time frame. However, tech often advances faster than the human capacity to deploy and operate it at scale. But because these changes were now considered to be a competitive necessity, the race was on for talent and technology. Reskilling supply chain workers became a top priority along with the acquisition and deployment of these new practices. These agility choices were made over lean operations. Speed was more of a desired outcome than simply keeping less stuff on the shelves. The downstream effects on internal and external relationships were better served by agile over lean, so a lot of companies have chosen this route.
MIT Executive Director, Chris Caplice on the Advancement in Transportation & Logistics Careers
Agile Supply Chain Technologies
Because agile supply chains deploy “just in time” inventory tactics, the use of technology is paramount to successful operations. Newer cutting edge technology allows companies to streamline the flow of goods. Managers and front line operators also have a more real-time snapshot of inventories which allows them to create signal adjustments in production and distribution priorities.
Machine learning, robotics process automation, and artificial intelligence are all deployed in agile supply chains. These tools aid in customer demand forecasting and inventory planning as well as things like route optimization. Technology and the internet of things create cross sectional snapshots of supply chain operations, logistics, planning and transportation processes.
Organizations can leverage predictive analytics, simulation modeling, and scenario planning tools to detect potential supply chain risks and disruptions before they happen. This proactive and agile strategy empowers supply chain professionals to create contingency plans, mitigate risks, and enhance the resilience of their operation.
Agile definitely requires a commitment to technology adoption and adaptations. There’s more leaning into these changes, which requires the right kind of talent who are technologically savvy enough to operate, maintain, and deploy needed tech.
Supply Chain Hiring Strategies in Agile
When looking to hire for agile supply chain candidates, it’s important to assess technological and analytical skills through technical evaluations and case studies. Seek candidates with diverse backgrounds in procurement, logistics, and production, and those with cross-functional experience or leadership in projects spanning multiple supply chain functions.
Hire agile supply chain leaders by defining precise roles, using targeted recruitment, and conducting behavioral interviews. Develop them through continuous training, mentorship, cross-functional rotations, and fostering innovation. Key attributes include adaptability, strategic vision, technological proficiency, collaboration, and an innovative mindset.
Because of the prominence of technology and IT in agile, finding leaders can prove to be a challenge. And even when you are able to hire, oftentimes operational burdens fall disproportionately on too few people. This can create retention challenges and burnout, leading to diminished work product or even quiet quitting. Retaining these employees should be a priority so work with them to determine what they need and be willing to accommodate those needs. And don’t lose touch with emerging employment trends like hybrid work places, unlimited PTO and even 4 day work weeks as ways to ensure higher morale. Employers could benefit from working with supply chain recruiters who have more streamlined access to the networks of individuals and organizations to find this available talent.
Conclusion
Is the future of supply chain agile, lean, or somewhere in between? That’s a great question and likely is the combination of both. A rapid rise and deployment of machine learning, robotics, artificial intelligence and automation could be developing a hybrid approach to planning and analytics. More real time understandings of consumer demand, forecasting, and behavior can be gleaned using these technological advances. Agile is not for everyone. It places a lot of pressure on suppliers as well as logistics personnel. It may not be suitable for every industry. However, the tech factor isn’t going away and likely will be deployed with greater efficiency and effectiveness into the future. The future could even be digital and autonomous with the work towards fully digitized supply chains operations having already begun. Let’s not get ahead of ourselves. The supply chain is people and will remain so. The question just becomes what skill sets and core competencies will be required to manage an increasingly digitized and automated supply chain?
