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When the COVID-19 pandemic struck, producers of consumer products were scrambling to keep up with demand. One supply chain executive told us that according to internal projections, his company could have sold 400% more personal hygiene products over the first six months of the pandemic. But years of cost cutting had eliminated any slack capacity and alienated suppliers. Those sales—and the customers behind them—went instead to more agile competitors that had invested in flexible equipment and built long-term relationships with key supply chain partners. His experience is not unique. Many companies have struggled to keep up with recent market shifts. But despite the missed opportunities and frequent disruptions, very few have taken a structured approach to investing in supply chain agility. Supply chain agility reflects how quickly a company can adjust operations to avoid disruptions while capitalizing on opportunities. In other words, agility enables companies to thrive in uncertain environments. To enhance agility, companies need a structured approach for identifying and funding projects that build internal capabilities and external relationships. Concretely, this means making targeted investments that improve areas such as decision-making, process cycle times, and capacity optimization. Ultimately, the goal is to provide managers the flexibility to respond to a wide range of possible outcomes. But where to begin? Few companies have a process in place, and available agility frameworks provide limited guidance.The lack of practical advice on how companies should be thinking about agility investments is what prompted our research (see “About this research” sidebar). Based on discussions with dozens of supply chain leaders, we have developed a framework that breaks agility into three broad categories: digital, physical, and process.
Visit https://www.supplychainquarterly.com/articles/7478-how-to-avoid-the-next-crisis-a-new-approach-to-supply-chain-agility to view the full article online.
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