Definition
Supply Chain Agility is an operational strategy focused on inducing velocity and flexibility in the supply chain. A supply chain is the process of moving goods from the customer order through the raw materials stage, supply, production, and distribution of products to the customer. All organizations have supply chains of varying degrees, depending upon the size of the organization and the type of product manufactured. These networks obtain supplies and components, change these materials into finished products and then distribute them to the customer. Included in this supply chain process are customer orders, order processing, inventory, scheduling, transportation, storage, and customer service. A necessity in coordinating all these activities is the information service network.
The difference between supply chain management and supply chain agility is the extent of capability that the organization possesses. Key to the success of an agile supply chain is the speed and flexibility with which these activities can be accomplished and the realization that customer needs and customer satisfaction are the very reasons for the network. Customer satisfaction is paramount. Achieving this capability requires all physical and logical events within the supply chain to be enacted swiftly, accurately, and effectively. The faster parts, information, and decisions flow through an organization, the faster it can respond to customer needs.
Agile organizations are market-driven, with more product research and short development and introduction cycles. The focus is on quickly satisfying the supply chain, the chain of events from a customer's order inquiry through complete satisfaction of that customer. All physical events are enacted quickly and accurately. The faster materials, information, and decisions flow through an organization the faster it can respond to the demands of the market. The keys are flow and time.
Achieving agility starts with the physical flow of parts, from the point of supply, through the factory, and shipment through agile distribution channels. It emphasizes closing the distance between each point in the flow. Within the factory successive operations in the work chain are physically coupled, removing nonvalue-adding functions and inducing velocity. Parts move with high velocity through the work chain. Natural points of delay are eliminated and simplified.
The information chain is streamlined and electronically linked at every point, so that information flow is direct- -without interruptions and delays. Business cycle times are be reduced to the time it actually takes to effectively process information.
Agility requires a company to be nimble in its response to changing needs of the market. Time-to-market is short. Service is highly responsive and open to new challenges. Quality is impeccable. The factory is able to quickly changeover from one product type to the next. Flexible manufacturing and assembly cells provide this physical capability. Quick changeover techniques are mastered using modular fixturing. Tools are located in close proxibility to the point of use. Equipment is collocated for speed and responsiveness.
An agile company is organized for velocity and flexibility by reducing the number of vertical and horizontal layers in the organization chart and rearranging them around natural processes. Organizational functions are collocated into physical groups that work fast. Physical walls that stand in the way of good communication are removed.
The Issues
Supply Chain Agility is in direct opposition with traditional manufacturing approaches characterized by use of economic order quantities, high capacity utilization, and high inventory. It requires radical change. Excess capacity is welcome instead of taboo. Make-to-order capability replaces mass production, and lot sizes of one replace EOQ's.
A major issue with Supply Chain Agility is the high capitalization often required for flexibility in the production and assembly areas. However payback periods of 2 years or less are common.
However, just like anything else, Supply Chain Agility is no panacea, nor should it be embraced as a religion. It is an operational strategy that, if implemented properly, will provide a new dimension to competing: quickly introducing new customerized high quality products and delivering them with unprecedented lead times, swift decisions, and manufacturing products with high velocity.
Pragmatic Applications
Supply chain agility is a combination of speed and flexibility and is difficult to achieve because it requires radical changes to traditional thinking. A broad front approach to implementation is likely to bog an organization down. We suggest a series of pilots following a master plan, taking a "grassfire" approach where continual pilot implementations over several years eventually result in a "blaze" of change.
Our Approach: Tools from a Toolchest
Rockford Consulting Group applies concepts and technologies as the situation warrants, that will result in the ultimate benefit to our clients. We treat strategies, technologies, and methodologies as tools in a toolchest, and use them when they offer practical solutions and achievable results. We believe that each client situation is unique, with its own unique set of solutions. (Please see our supply chain management consulting services Supply Chain Management Consulting Services )
Why Us?
Rockford Consulting Group can provide long-term assistance to many companies in a variety of industries. The firm has a cadre of the best supply chain consultants in the world today, providing high quality professionalism through the use of experience and innovation.
We subscribe to the Institute of Management Consultants Code of Professional Conduct. All consultants engaged on projects adhere to its principles. Whenever possible we will use consultants certified in their particular specialty area. Certification assures that consultants have substantial prior experience in their specialty, and their competencies have been tested by the IMC, and verified by a number of clients. This assures our clients that we are assigning the highest qualified consultants in the profession.
We provide technical expertise, team facilitation, leadership, and direction in deciding how you will meet the challenge. We refer you to our Qualification Statement for further details on our background, areas of specialization, concepts and technologies applied, staffing, operating policy, approach, companies and industries served, case studies and references. Equally as important, we train our clients to sustain new methods of manufacturing and the consequential benefits over time. Your company will benefit directly from this training.
We have achieved an efficiency in our approach to assignments that allows us to provide high quality technical and managerial advice in a much shorter amount of time than could be accomplished years ago. We are able to do this because of the extensive consulting experience that each of our specialists has.
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