Supply Chain Management (SCM), driver or barrier? Part 3 of 3.
In the previous article, we checked out Lean Thinking. Now it is the turn to Agile Thinking.
Agile Thinking
Agility in the sense of the ability to match supply with demand. It is not necessarily synonymous with leanness. Agility is needed in less predictable environments where demand is volatile and the requirement for variety is high. Also, an agile supply chain is customer responsive because it is capable of reading and responding to end-customer demand, rather than lean thinking which is based on forecast demand.
Agile thinking components are:
- Delivering value to the customer
- Being ready for change
- Valuing human knowledge
- Forming virtual partnerships
Also, agile supply chain practices imply customer demand fulfilment rather than market mediation. Therefore to respond quickly to the customer demand, allocation of finished goods is necessary. Hence that inventories will increase, but this is in order to anticipate unknown demand.
In order that agility can be used as a driver to overcome global recession, there are 2 concepts to consider: postponement and decoupling points.
Postponement and decoupling are important concepts of agility. By making customized product changes as close as possible to the time of purchase by the end-customer it is possible to provide a wide variety of customized products without incurring high inventory, processing and transportation costs.
This is because agile strategy is concerned with assigning capacity so that products can be made rapidly to meet customer demand that is difficult to forecast. Due to the situation of recession, cost efficiency along with effectiveness represents strategic key elements for obtaining competitive advantage.
Therefore, supply chains should be widely developed by companies, as it enables to increase the degree of supply chain flexibility. Hence mitigate supply chain risk and enhance the resilience of businesses.
At the end of the day, you will see that both methodologies can be used combined.
Thanks so much for your time and keep reading this information. I hope it can be of help to know more about this topic we enjoy, which is supply chain management.
In the meantime, take care and keep walking on my friend.
j.maldonado.gtz@gmail.com
Jorge Maldonado. Egresado de la Universidad Autónoma de Nuevo León como Ingeniero Administrador de Sistemas. Cuenta con una Maestría en International Logistics and Supply Chain Management en la Universidad de Glamorgan South Wales en Reino Unido. Profesionalmente se ha desarrollado en empresas de manufactura y tecnologías de información.
