What is Agile Supply Chain Management?
The complexities of the modern supply chain for businesses grow more complex with each passing day. While many companies have switched to the lean supply chain concept, the agile supply chain is becoming more prevalent thanks to advances in digital technology. The agile supply chain management relies on using real-time data to compare against forecasts of future demand. Plus, it adds the ability to leverage what you are currently doing to create greater productivity and efficiency in the future.
You can think of agile supply chain management as an active system that anticipates future demand while keeping track of what you currently have in stock. You can avoid potential shortages and overstocking your inventory when you put in agile supply chain management.
How to Create an Agile Supply Chain Management?
You will need to incorporate all the latest tracking techniques provided by digital technology and combine it with forecast of future demands. This means focusing on what you have in stock, having real-time information on what goes in and what leaves your inventory, and looking at past sales records to see what items are most likely to be in-demand depending on the day, week, or month of the year.
Agile Supply Chain Strategies
This proactive approach to managing your supply chain means that you can anticipate demand and react swiftly to the changing environment. This means that shifts in the economy, new trends, customer demands, and customizing certain procedures can all be reacted to quickly when you agile supply chain management.
- Environmental Disasters: Hurricanes, earthquakes, tornados, and other weather changes
- New Trends: A new toy on the market can change consumer demand quickly
- Customization: Adapting supply chain strategies to your company
- Economy: Changes in economic conditions that affect consumer spending
There are thousands of companies around the world that are embracing this form of management, but the most popular is Amazon. They have been able to take this form of supply chain management and use it efficiently to ensure that customers get their purchases on time.
Lean VS Agile Supply Chain
For some, agile supply chain strategies may seem similar to those that using lean supply chain management. However, the difference lies in how each type of management is performed. While a lean supply chain will focus on removing all the extra cost, an agile supply chain focuses on future forecasts to anticipate demand and prepare for it.
It’s quite common for lean supply chain strategies to leave your inventory overstocked on many items because the focus in not on the future. While an agile supply chain will be closer to the right amount and reducing overstocking issues considerably.
All things considered, an agile supply chain management is superior because it builds on the advantages of a lean supply chain while accounting for future demand. It’s little wonder that more companies are now embracing an agile supply chain for their preferred method of keeping inventory. Participants of supply chain management certification and logistics certification programs, study the agile supply chain in more details.
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