How to Make Your Supply Chain More Agile
Every company that transports goods likely appreciates the need for agility within its supply chain. For those who don’t know, supply chain agility is the ability for a supply chain to respond effectively to unforeseen circumstances, whether those circumstances be environmental, economic, consumer-based, competition, governmental, or a combination of all five.
While most companies understand the need for supply chain agility, not everyone knows how to implement it successfully. Here at Redwood, we have the knowledge and expertise needed to apply supply chain agility, through working with our large portfolio of customers.
When looking to make your supply chain a bit more flexible, there are four factors to keep in mind; awareness, user-friendliness, reaction speed, and adaptability.
Awareness refers to the ability to identify both internal and external opportunities and threats for a company’s supply chain. Awareness is massively important for recognizing problems and potential areas of competitive advantage. If a company never identifies these factors… creating a truly agile supply chain becomes next to impossible.
Think of it like attempting to hit a target that you can’t even see. You first must know where and how to apply resources in addition to knowing how to manage those resources before you can see any benefits. There are a few ways companies can boost their supply chain awareness. One way is to improve data capture through a strong TMS. This type of platform is what allows a company to really drill down into their supply chain and identify areas that could use a little improvement.
A second way to handle this is to perform a routine SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis. This type of analysis provides a formulaic structure for identifying areas of interest within a supply chain. When the areas that a SWOT analysis focuses on are compiled and compared against one another, some rather interesting but previously unnoticed gaps begin to stand out.
Finally, you can improve supply chain awareness via pooling resources and expertise from every level and department of your organization, everyone from the CEO to the lowest guy on the totem pole.
This category may seem a little self-explanatory but it is incredibly important to create a user-friendly supply chain. By this, we mean creating easy-to-access methods of acquiring and viewing supply chain data even across all of your disparate systems. Creating an easy-to-use interface, simply put, improves both efficiency and time utilization.
Companies can create a more user-friendly system by implementing their own software, tailor-made to their specific tasks to help automate some of the more routine processes that could be passed along to the system to handle. However, building and implementing something like a TMS from the ground up can be extremely expensive and time-consuming, to say the least.
To lower this barrier to entry, smart supply chains may find a better approach is to outsource software from a reputable 3PL. Redwood Logistics, for example, possesses a variety of software solutions that can create a much more streamlined user experience.
The ability to quickly respond to opportunities and threats is oftentimes the only difference between a failed business and a Fortune 500 juggernaut. There are a lot of factors that contribute to the speed of reaction for an organization’s supply chain. First, you must have the awareness to identify the opportunity or threat. Only after can you respond in a quick fashion.
Supply chain speed is largely dependent on a company’s leadership being open to new and inventive solutions to problems. If a company’s leadership is stagnant and stuck using archaic methods to solve modern problems then reaction time across the board is undoubtedly going to feel it.
Just like how the human body follows the head, a company will respond swiftly if the leadership is able to quickly react.
Adaptability is the ability of a company to modify its solutions to meet a variety of unique problems and opportunities. The ability to adapt is oftentimes dependent on many of the factors we discussed above, such as leadership flexibility and supply chain awareness. This could be thought of as the end goal for a supply chain agility implementation.
Companies that can adapt faster to a variety of internal and external factors will see a significant rise in their competitive advantage over their industry peers. Adaptability can be further improved and scaled by outsourcing to a reputable 3PL.
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