Agile Thinking fires Agile Supply Chains
I first heard the term "Agile Supply Chains" during my initial years in supply chain; and naturally summed-up my understanding purely going by the literal meaning of the word "Agile" (which was fairly reasonable). I then came across a paper titled "The Triple-A Supply Chain" that beautifully explained how supply chains can become agile. And during my study sabbatical, I had the opportunity to study this subject in greater detail.
So, we understand that the age-old mantra of running supply chains efficiently and measuring it on only two parameters - cost and service - is no longer sufficient (the "Efficient Supply Chains"). That to gain a competitive edge in manufacturing/service operations, supply chains needs to not only be able to rapidly respond to the customer's demand ("Responsive Supply Chains") but also demonstrate flexibility and nimbleness in minimizing supply disruptions.
And how does one achieve this? By forging supplier partnerships (via integrated processes and information sharing); by turning demand driven instead of forecast driven; by actively hunting for postponement opportunities in the supply chain; by building a streamlined logistics/distribution network and lastly by building inventory of critical components (much to the chagrin of die-hard JIT proponents). However, I believe that for all these measures to be effective in an organization, the organization needs to have a culture of fast decision making.
Let me illustrate this in the domain I know the most i.e. Software Services. Quite often, the challenge in the biggie IT firms after bagging a large deal is to quickly staff the program. The challenge multiplies if the program spans across geographies and across various service lines; there-by cutting across the firms' business/geographic units (essentially involving various decision-makers). Now in such a scenario, you may have established all the necessary Agile measures such as actively sharing advance information with sub-contractor/recruitment firms (aka forging supplier partnerships), maintaining a resource-bench of key skills (aka critical inventory) and having the visa and travel processes set-up for quick deployment of resources (aka streamlined logistics). But if your organization's culture and set-up does not promote an environment of quick decision-making, all these measures will fail to yield the desired results. For instance, delays in budget approvals for sub-contractor hiring or for visa/travel bookings; or delays in "releasing" resources from under one "umbrella" to another vastly hampers the firm's agility.
