Build an Agile and Resilient Supply Chain in 4 Steps

In an era when the most unpredictable challenge imaginable, a global pandemic, turned the business world upside down, the need for a reliable supply chain that can react quickly to any and all disruptions became the top priority for organizations. This is by no means an easy feat, and many are familiar with the concept of having an agile and resilient network. It makes sense that businesses would benefit from a supply chain that provides satisfactory results in the best of times but is also capable of withstanding the worst of times as well.

This is the goal that organizations have strived to achieve for many years, but there are challenges that first must be overcome, starting with the gap that exists between objectives and outcomes. As businesses hunted for efficiency, many inadvertently overoptimized. They’ve cut here, reduced there and instigated Just-In-Time manufacturing. Even more challenging, supply chains now stretch across the globe, creating international issues that many businesses did not anticipate.

Most notably, it can be difficult to manage and gain visibility into a supply chain that crosses borders and continents. Then, when a natural disaster or a global event occurs—such as the COVID-19 pandemic—worldwide supply chains feel the burn far more than the difficulties a more local supply chain may have encountered. Thus, supply chains are vulnerable.

Strengthen global networks

Organizations have eagerly embraced globalization, and with good reason. Globalization offers many opportunities that cannot be attained through localization, such as the potential to expand to new markets and the ability to utilize less expensive and/or more inventive supply chains. But it also increases complexity, competition and the need to manage widespread networks that, as previously noted, might have had limited visibility.

The majority of supply chains struggle to manage the different parts of their network in a manner that supports fast and accurate decision-making. They lack insight into what’s happening, both in and out of their organization and know that their networks will have to adapt as needed. Some might say it’s like trying to conduct a huge orchestra with blindfolded musicians who are asked to play slightly different tunes. The conductor might hope for a cohesive sound, but any success in accomplishing that could be attributed to luck more than anything else.

This serves as a powerful reminder of the importance of visibility, which is absolutely vital to any business striving to achieve agility and resiliency, and the vulnerabilities that can follow. The good news is that these vulnerabilities can be addressed by taking four necessary steps toward achieving agility and resiliency:

Step one: Ensure alignment throughout

In order to acquire the visibility businesses need to build a more agile and resilient network, they should start by making sure that there is alignment throughout. That means having their systems, processes and communications all aligned with one another throughout the network. As the foundation of collaboration, alignment covers both the supply chain and the business itself, ensuring that functions within the organization are involved in the network. This also ensures that every organization within the network understands the impact of their own individual decisions.

Step two: Lead networks without disruption

After alignment has been secured, businesses must be able to lead the distribution of goods and information across their networks without interruption. While some partners may feel like competitors, they must work together to achieve optimal success. When armed with greater visibility and the right information, businesses are empowered to make decisions at the right time – and as a result, can avoid siloed metrics and KPIs.

Step three: Focus on both forms of agility

Organizations must also focus on both forms of agility, starting with process agility, which is the empowerment of people to make rapid decisions. This can only be accomplished with the right data, in the right place and at the right time, which is needed to generate the required alerts and insights. From there it is necessary to use end-to-end scenario models to see what impact each decision will have on the network.

There is also structural agility, which is the ability of the network to flex rapidly in the event of a disruption, such as harsh weather. By zeroing in on event-driven action, and by utilizing insights from multiple data sources, organizations will be equipped to respond to these events with greater efficiency and success.

Step four: Combine alignment, flow and agility

Last but not least there is orchestration. By combining alignment, flow and agility, businesses can improve coordination within the entire network. It may even be able to do so in real time – or close to it – once a course of action is decided.

Aim for the differentiator

Organizations must be prepared to quickly adapt to any events, no matter the circumstance. This will prove to be a significant differentiator between the supply chains that succeed versus those that are playing catch-up. By putting agility front and center, businesses can ensure that they aren’t negatively impacted by the unexpected. They will be better equipped to unearth and go after new opportunities and will be able to withstand unplanned events as well as competitive challenges.

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