Raising Agility - create greater supply flexibility by getting closer to customers

Few sectors or companies have escaped the economic downturn unscathed. For most recovery is both highly unpredictable and highly variable by geography and sector. The return to growth means a profound impact on the supply chains of many organisations.

To tackle this, companies need to adapt their supply chains in three distinct ways:

1. Introduce flexibility and collaborate with suppliers to fulfil demand

There is no doubt about the key role of the supply chain in creating real business value: producing and delivering quality products and services on a global scale, whilst fulfilling customer demands is more challenging than ever. Introducing supply chain flexibility across the end-to-end supply chain requires closer relationships with customers and suppliers enabled with better information and product flows.

2. Be creative and take difficult decisions with partners to free up cash

Although the benefits of cost reduction programmes are clear, organisations still need to maintain “business as usual” whilst restructuring. It is here where businesses hit the brick wall; access to credit from cautious banks has become scarcer and more expensive; some organisations’ ability to raise critical funds for research and development are limited.

Organisations have often taken an insular approach to releasing cash, such as reducing their inventories or changing payment terms. However, they have wider reaching effects on the end to end supply chain. As a more inclusive and creative approach, increasingly, organisations are placing cash management on the executive agenda and looking to the whole supply chain by collaboration and technology at the heart of the solution.

3. Get closer to suppliers through proactive risk management

During the downturn many businesses have been exposed to reduced revenues and increased commodity prices, coupled with a weakened supplier network. As uncertain growth returns, a key element for an agile supply chain will be to proactively manage supply chain risk by moving closer to suppliers. A recent PA survey has pointed key approaches to manage risk in an agile supply chain.

Agility will be key to the fitness and success of future supply chains

In the current environment, supply chain and procurement leaders need to make supply chains fit for the future by being closer to the customer and more agile. Companies can adapt to become more agile and help them deal with whatever the future holds by creating greater supply flexibility, getting closer to customers to release cash and getting closer to key suppliers to manage risk. Organisations have to look beyond survival and find ways to grow. This is challenging given the demand and supply markets have changed but re-enforcing the position of supply chain function as one of the key sources of value creation.

To find out how PA can help you secure the benefits from agile supply chains, contact us now.