In the globalized digital economy and information age, the customer expects the goods to be delivered within 24 hours, the customer’s expectation has increased remarkably, market conditions have drastically transformed and the volatility has become a new normal in the market.
In current scenario supply chain is not just a setup of process for production and distribution of goods, the supply chain has become a crucial element of business model.
Today the supply chain must be responsive, customer centric and demand driven. It should be highly flexible to quickly adapt to changing situations.
What is agile supply chain?
The concept of agility was mooted by (Goldman et al.1995). It means “readiness to change” for any volatility in the market. Agility is defined as a business strategy that is more responsive and totally demand driven. As the customer expectation and buying behavior are buying changing at a very rapid pace, so does the whole supply chain management changes. The fundamental drivers of the agile supply chain are Speed, Cost, and Efficiency. Agile supply chains are based on the sensitivity to consumers demand. Here, sensitivity refers to the ultimate consumer’s demand, in terms of volatility of demand.
How to transform into agile supply chain?
The key to implementing a true agile supply chain lies in incorporating flexibility into every step of your production and distribution process. While it sounds simple in theory, many organizations struggle in moving from a lean supply chain to an agile one.
The main element of the agile supply chain is responsive (market sensitive), information sharing(virtual), Seamless process, Collaborative (network based). The theory sound goods and simple, but organization struggle to shift from conventional supply chain to an agile. Few things that can help you to move towards agile supply chain are-
Collect all Information – Try to get all real-time information, it can be macro and micro economy condition, consumer behavior, demand trend, supplier information and inventory details etc.
Share information – All the information be shared with all the departments and stakeholders, as demand information is gathered, shared it with all the stakeholders. Timely information is a crucial element in an agile system, it alerts all the concern parties and helps to take the required action at right time.
Seamless Workflow – The workflow in entire supply be seamless, identify the areas where still manual entries are going on and try to digitize. Ex- As a requisition request is made by the production team the manager should instantly able to see the request and take the required actions. As the request for PO is made, the manager should take an instant decision. When the goods came to the dock it should be immediately entered into the system etc.
There are many loopholes in current supply chain, which hinder decision-making process and slow down the complete system
Automation – Even after digitization by using the ERP, many activities are still manual automation overcome the manual entries error, improves decision making process and workflow
Mobility – Embrace mobility, many of the existing system and workflow processes can be made more efficient with workflow specific mobile apps. The usage of enterprise mobility apps improves decision-making process, reduce manual processing costs, errors, time lag and streamline supply chain. Let’s look at few workflow processes which can be automated using mobile apps
1. App for AP approval – AP Accountants/approvers can see the AP Invoices on their mobile device, can also take the required decisions
2. App for Approval of Expenses– Employees want to get reimbursed for their travel and other expense as fast as possible. With smart approval app managers can see all expenses to be approved on their mobile phone, can take a required decision.
3. PO Approval App – Managers can see their Purchase Orders on their mobile apps, can take required action
4. Goods receipt app – Material handlers can see the order details such as order number, Storage location, etc. on their mobile device, can also manually adjust the values.
Finally, in the current business environment, agile supply chain is the best way to stay competitive and be customer centric, though the transformation looks challenging but small step taken towards agility can positively affect the organization’s balance sheet.