How Data Bridges the Gap for Supply Chain Agility
Ten years ago, hearing the phrase “supply chain disruption” was far from common. COVID-19 changed that. All at once, supply chain operations were at the forefront of the public consciousness; shortages and price increases were front-page news. The formerly unseen beating heart of our modern economy was put on irrevocable display.
Amid this new focus on supply chains and their role in the economy, national security and business success, manufacturers explored a variety of supply chain management models to improve efficiency and optimize different aspects of their operations.
As was quickly discovered, different models had different strengths. Lean management models prioritized cost reduction; continuous flow systems relied on low-friction operations; flexible supply chains were built to adapt to uncertain production needs. Through this trial and error, one specific framework stood out for its ability to combine these different strengths: the agile supply chain model.
Building blocks of supply chain agility
Agile supply chains seek to combine the advantages of the models noted above by marrying adaptability with operational sustainability. The goal is to weigh efficiency, costs and quality assurance in equal measure when evaluating decisions against business objectives. This helps ensure that each business can achieve its unique, optimal outcome.
Unlike lean models, which focus on “just-in-time” operations, or continuous flow, which aim to reduce friction at all costs, the agile supply chain model takes a big-picture view of operations and is built to respond to contingency scenarios. As a result, it experiences less volatility, keeps costs down and is more resilient.
Building an agile supply chain relies on developing four key components:
• Measurement criteria: Benchmarks and metrics provide a standard by which businesses can evaluate progress.
• Continuous visibility: Paired with contextualized data, real-time visibility enables quick pivots.
• Transparent communication channels: Encouraging information sharing between stakeholders keeps up- and-downstream partners on the same page.
• Comprehensive response scenarios: Modeling potential incidents allows leaders to plan ahead, monitor for indicators and respond proactively as conditions change.
At the center of each of these components is data: comprehensive, contextualized, enterprise-spanning data. By turning operations into quantifiable measures, businesses can see what’s really happening behind the scenes, enabling them to adjust to formerly overlooked pressures.
Data at the forefront
Businesses looking to enhance the agility of their supply chains may benefit greatly from looking critically at their:
• Operational efficiency: Measures like overall equipment effectiveness, cycle times and energy mix shed light on how production is or is not working.
• Sales history: Seasonal sales patterns and changes in material availability can help leaders plan for ups and downs, while real-time monitoring can help businesses get ahead of unexpected trends.
• Market trends: Pop culture and numerous other factors play a role in how a business performs. Robust databases should include real-time insights into key market indicators as well as provide historical context about these factors’ impacts on the business.
• Partner performance: Suppliers, shippers and other partners face their own market pressures, so keeping tabs on their operations can help businesses stay ahead of issues caused by other organizations.
Final thoughts
In an uncertain world, the only constant is change. It’s in environments like these that the agile supply chain shines.
The information was always there, ready and waiting to reveal patterns and inform the detailed response scenarios on which the model relies. Now, we have the tools to capture and contextualize operational data, and it’s bringing agility and responsiveness within reach. With any luck, connected supply chains, increasingly powerful analytics and a desire for continuous improvement will make disruptions a thing of the past.
