Supply chain agility: How big is your gap?


I think you’ll agree that supply chain efficiency is no longer a differentiator. As C.K.Prahalad puts it, ‘Some aspects of managing in a volatile environment, such as focusing on operational efficiency and staying liquid, are givens. But more important are the abilities to scale up and down and reconfigure resources rapidly.’

Prahalad calls organizations where people and capacity can be ‘rearranged and recombined creatively and quickly’ velcro organizations. In my experience, the key to being ‘velcro’ or ‘agile’ lies in decoupling your resources from specific sources of demand.

Are you a large logistics service provider with many customers? Why not view all your capacity – trucks, trailers and warehouses – as a common pool of resources. Instead of linking specific resources to a particular customer, you could draw on that pool to configure the best possible solution for each customer.

Are you a manufacturer with multiple production sites and a regional, or even international, distribution network? Why not decouple your production facilities and distribution centers from specific products and customers? Instead of restricting yourself to what is usually produced in a particular factory or stocked in a certain distribution center, look for the best way to use your global capacity to satisfy demand.

Are you a service provider with a globally dispersed workforce and customer base? Why not treat all your personnel as a single pool of resources? Service requests – both long-term and ad hoc – could then be matched with the most appropriate personnel, while taking into account travel time and costs, skills, and employee preferences.

Of course there’s more to supply chain agility than a willingness to pool resources. You also need an intelligent planning and optimization platform to use that pool efficiently. It’s this ability to configure and reconfigure resources in real time that will enable you to respond rapidly to new customer requirements and changing markets.

And here we come up against another reason for a supply chain agility gap. According to the 2013 Gartner-Supply Chain Digest survey, while 85% of respondents believe that flexible supply chain applications are critical, only 42% say their current software provides that flexibility.

Can you tailor your products and services to meet the unique and constantly evolving requirements of existing and new customers?

Can you do this quickly and effortlessly?

Supply chain agility is a powerful differentiator. What are you doing to make sure you have it?

Centralized supply chain planning: Busting the myths (Part 1)
Centralized supply chain planning: Making it work (Part 2)