Supply chain is witnessing more complexity than ever before: increasing numbers of supply chain partners and stakeholders, networks that are becoming more globalized and diversified, and increasingly specific customer requirements. Added to this complexity comes significant uncertainty in forecasting with rising volatility and disruptions.
How, you might ask, given this current complexity, can businesses remain competitive?
Over the last 20 years or more, we have been successful with the strategies we applied to reap economies of scale and make our businesses lean. Due to the speed of technological development, organizational transformation and myriad other factors, things have changed – making now the time to make your business agile from strategy to operations.
By focusing on the following areas, you can make supply chain agility a strategic priority and empower your business by turning complexity into a competitive advantage.
Author
Kai Althoff
CEO at 4flow
Step 1: Leverage tech opportunities
There are endless possibilities in the high levels of connectedness and data currently available to businesses. From integration technologies to best of breed applications that can be added in modular, composable structures – there is so much out there we can use.
Innovative technologies in automation and artificial intelligence, for example, can lead to enhanced process efficiency and decision-making to help planners to make decisions faster, be more agile, and get ahead of the game.
Using technology, data can be exploited for actionable areas while uncertainty can be integrated into data models to ascertain more about the future using simulation methods.
And let’s not forget, by choosing the right partners to lever the operational value of technology fast, your business can quickly gain a competitive advantage.
Step 2: Get an agility-driven mindset
Agility-driven supply chain transformation is very much a mindset.
The agility-driven mindset is one that uses collaborative, end-to-end thinking in a culture that proactively deals with change and uncertainty – and most importantly, it takes people along with it from the very beginning.
The mindset brings digital capabilities up to speed and combines them with cross-functional, globally integrated processes. In taking the “bull by the horns,” it embraces the complexity of today’s VUCA landscape to convert surrounding uncertainty into a competitive advantage.
Step 3: Manage complexity
With the opportunities in technology and getting your agility-driven mindset, comes the task of managing complexity.
This is accomplished by establishing cross-functional, harmonized processes and integrated decision-making about performance, costs, and the ESG footprint.
Together with flexible, resilient structures, composable operating models and increased speed in operations, your business can use surrounding complexity to its advantage.
Executive priorities – starting with strategy
Making your supply chain agile starts with a strategy that focuses deep into the DNA of your supply chain to see the potential that lies therein. This is done by making supply chain agility an executive strategic priority.
By embracing the opportunities of technology and establishing integrated processes and harmonized structures as a basis to manage complexity, you are on the right path.
Next, by considering the right composable operating models and partners to lever the operational value of technology fast, your business can start to gain a competitive advantage.
Lastly, by taking people with you from the beginning – with collaborative, end-to-end thinking in a culture that proactively deals with change and uncertainty in an agile way, you can move mountains.
Gone are the siloed, top-down structures of the past – now is the time to think in steps, and focus on agile from strategy to operations to win the complexity game.
This article is based on my presentation “Agility-driven supply chain transformation – winning the complexity game”, presented in May 2023 at the Gartner Supply Chain Symposium/Xpo™ in Orlando, Florida.
Catch us again at the Gartner Supply Chain Symposium/Xpo Europe in Barcelona when Julian Schulcz, COO of 4flow, will present use cases from customers Converse, INEOS and more in “Agility-driven supply chain transformation – winning the complexity game”.