In our recent review of 10 Lessons from Supply Chain Leaders, we looked at Gartner Supply Chain Top 25 survey. This survey is where Gartner analysts research the supply chains of hundreds of companies. Through this work, they note what leaders are focusing on, where they are investing time and effort, and what can be applied broadly.
One of the most frequently recurring themes we identified in the report was that of supply chain agility.
We’ve discussed in detail the disruptions in the supply chain over the past couple of years across a diversity of causes, from the pandemic to geo-political challenges and one repeated theme is the need for greater agility to adapt to changing circumstances.
This article aims to discuss what agility means in the context of the supply chain and how you can achieve it in your organisation through technology and digital transformation.
What is Supply Chain Agility?
By definition, supply chain agility refers to a company’s ability to quickly adjust its strategy, particularly in procurement, inventory management and delivery to meet rapidly changing supply chain requirements. Companies with a high degree of supply chain agility can navigate change with ease, adapt to changing market conditions and take advantage of new business opportunities.
The Five Components of Agility
Now we have the definition of agility, what does this actually mean in practice? How can you begin to assess your agility?
The most common framework is a five dimension model consisting of:
- Alertness
- Accessibility
- Decisiveness
- Swiftness
- Flexibility
It’s clear that all of these factors are desirable in modern supply chain operations and also just how integral data, digital-native and technology platforms are in achieving these dimensions.
Let’s take a look at each in turn and explore how technology could help your company thrive in uncertain times.
Alertness
Key questions to ask:
- How quickly can your company detect changes in the environment?
- How quickly can you identify opportunities and threats?
The first dimension of alertness is often framed as the visibility of your supply chain. Before you can respond to changes, you have to be able to identify them. Also, if your team isn’t working as a cohesive whole, then blind spots are inevitable.
Technology, like the SourceDogg platform, gives you the ability to be more alert by bringing together all of your supplier data in one place. You’re able to collect and analyse vitally important data to enable you to detect changes in the operational environment. Whether it’s lead times slipping, prices rising, delivery or other performance issues – your team should be in a position to recognise changes in the environment via dashboards and data feeds so that you can act accordingly.
It’s not just about reacting to problems either – when used by forward-thinking supply chain teams, technology can also help identify opportunities to buy stocks ahead of time, capitalising on offers and incentives from suppliers or fortifying competitive positions when materials are low in the market or prices are rising fast. It’s a delicate balance of risk vs. reward that only truly becomes apparent when powered by data. If you’re not aware of it – you can’t manage it.
Accessibility
Key questions to ask:
- Do you have relevant information to hand from suppliers?
- Are you connected to your sales teams and customers to understand demand?
- Can you access the data required to confidently make decisions?
Data accessibility is one of the main reasons our clients first engage with our teams. Sometimes data is siloed across business units, departments or divisions, sometimes it’s hidden away in a maze of inboxes and nested cloud folders… and sometimes it just doesn’t exist.
This puts your business in a very tricky scenario and one that is anything but agile or ideal!
Data that is accessible by everyone, 24/7 in any location is essential for streamlining efficiency and team effectiveness in the modern business environment. That’s why our cloud supplier master data feature of the SourceDogg platform is so popular.
Accessible, relevant, complete data is a core tenet of business agility. It shouldn’t take your teams hours of work to search for it either. The data should be on hand, clear, concise and consistent in format and ready for analysis so you can adapt to anything the supply chain throws at you.
Decisiveness
Key questions to ask:
- Do you have processes in place to analyse the data and allow for quick decision-making?
- Can you make decisions swiftly on supply chain operations?
- Can you shift tactics based on changing information?
The main benefit to using technology is the speed of analysis, scenario planning and modelling that well-structured data allows your company to have. This helps remove any anecdotal or subjective analysis that is full of bias and grounds the members of your team with unemotional objectivity.
It promoted a data-driven working culture too and over time, your teams become more agile in their practice, not just because of technology.
Swiftness
Key question to ask:
- When your company makes decisions on operations or tactics, can you quickly implement them?
This is more of an operational and process-based agility measure, but an important one nonetheless. You can have all the data and technology to hand, but if you’re then hamstrung by the inability to implement it, it’s all for nothing.
That said, technology does help speed up the internal processes to make things happen – by presenting clear business cases using data that are hard to argue with. The agility cycle mustn’t break at this point where action needs to be taken.
Flexibility
Key questions to ask:
- Can your suppliers quickly meet increases in order sizes?
- Can your suppliers quickly adapt to changes in the specification of orders?
- Can your suppliers adjust delivery or lead times?
Flexibility is the ability to modify your range of tactics and operations to the extent needed to implement the strategy (decisions made in “decisiveness”)
Speed or swiftness as described above isn’t necessarily the only factor in agility play. By mapping your supply chain, understanding tiers and sub-tiers, capacities, competencies, quality and much more – this data-led insight gives you the ability to adapt to the circumstance effectively. If you don’t have the data to hand for these factors, you don’t know if you can make the changes identified by your alertness and analysed with data accessibility.
This could be as simple as getting sign-off to hold 3 months of extra materials due to potential demand increases and supply chain disruptions or price hikes. You may not have the breadth of suppliers to facilitate this, or the depth and terms with those suppliers so that you can secure an adequate allocation.
By implementing a technology platform like SourceDogg, all of this insightful data can be plugged into the system, allowing you to assess your options realistically and identify where you are at risk through a lack of flexibility. It can help your team recognise where operations are rigid and you may have to find new sources.
Agility is built on Digital Transformation
Creating agility within an organisation isn’t a simple task and we also do not underestimate the time, energy and resources required to implement a true digital transformation programme. But the benefits are identified clearly above. Without data and tech powering your people and processes – how can you achieve agility across all of these dimensions? All of the five components have to work in unison for it to be effective too, as demonstrated in some of the examples above.
Hopefully, the five dimensions above can help you in defining supply chain agility in your own context and determine your company’s level of agility… and what you need to do about it!
We’re here to help and we’d love to show you the SourceDogg platform in a personalised demo so that you can see how using a cloud platform can supercharge your supply chain agility.
