Supply chains must take into account and consider the importance of agility within them. Especially considering the impact that COVID-19 had and has had, in addition to the worsening geopolitical risks due to the conflict in Ukraine, companies around the world are optimizing their services to have greater resilience and efficiency in the event of any eventuality.
One of the impacts of the pandemic that has most affected the population, in addition to the loss of human lives, has been the exposure of the vulnerabilities of the most efficient logistics services globally. Congested ports, empty shelves and an increase in prices of the basic basket have revealed the additional efforts that companies must make to maintain a more agile and resilient chain.
Importance of agile supply chains
As the owner of a transportation service company that deals with different supplies in particular, it is important to ask yourself questions like: what makes a supply chain agile? And the answer to this is very simple. First, we live in an era of disruption. Capabilities that improve the agility of this service can also help improve its resilience.
That is, as new forces continue to shake up the world’s supply sources—from increasingly severe and frequent natural disasters to geopolitical tensions—they will need to build the ability to reconfigure much more quickly to keep goods flowing. Historically, the approach to improving resilience typically relied on incremental inventories, suppliers, and capacities. However, these physical approaches to resilience come at a financial cost that is difficult to justify when supply chain performance is assessed primarily in terms of efficiency.
Today, the focus has shifted to using technology and digital tools, enabling new, more agile and adaptable capabilities that enable greater resilience, with less financial burden. Secondly, supply chain managers often operate much closer to markets and with a greater degree of granularity than managers in other parts of the organization.
What can make a supply chain agile?
logistics services businesses , it is metrics. These are key performance indicators, also known as KPIs in logistics. Added to this, performance expectations related to agility are not sufficiently standardized or well defined as they are for supply chain efficiency.
The focus on agility will vary depending on a company’s overall strategy and the design of the supply chain to support that strategy. It is worth noting that agility can be built in four areas:
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Demand detection
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Collaborative relationships
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Process integration
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Information integration
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Demand detection
Each of these areas requires new skills, most importantly understanding the role that agility plays in creating competitive advantage. As they incorporate agility into their operations, supply chain managers must find the right balance between agility, resilience and efficiency.
Collaborative relationships are very important
Supply chain managers who excel in this area, in effect, become information hubs by gathering data and observations from multiple sources to identify opportunities and risks. They excel at collaborating with key partners within the supply chain to respond in an orchestrated manner to these opportunities. They merge with key customers, exchanging market information and aligning demand forecasts and product flows.
They also have two-way information exchanges with a higher percentage of Tier 1 suppliers, sharing inventories, production schedules and capabilities to better optimize the response of the entire supply chain, rather than just one part of a single company.
Process integration should never be missing
Organizations with agile supply chains tend to break down traditional barriers, focusing on end-to-end process optimization. This fundamentally changes the speed at which an organization can respond to change. Process cycle times that were traditionally measured in months will now run in weeks.
Weekly processes will become daily processes. And the boundaries between planning and execution will blur. For some organizations, the ability to respond quickly may lead to a greater degree of vertical integration and direct control over a larger percentage of nodes along the entire supply chain, including production and supply plants and customer access points.
Increase quality with information integration
Advanced technologies such as cloud computing, 5G, the Internet of Things, and artificial intelligence are driving the digitalization of supply chains. Many organizations seeking to improve their ability to be agile often find themselves stuck due to the inability to easily and quickly share information across the organization. This same limitation is even more challenging when sharing information between entities in the extended supply chain.
Because of this, companies like ToolRides offer modern solutions that integrate with different actors throughout the logistics process, to make the operation much more fluid and frictionless. It's time to streamline supply chains with the help of ToolRides.
