The complexity of the supply chain is wildly growing these days. Digitalization, with artificial intelligence and machine learning, is transforming the way the global market functions.
The lean concept was once the most suitable method in the supply chain to achieve manufacturing effectiveness in management. However, changes around the world have created the need for a new way of thinking about logistics, which is the agile supply chain.
Despite the need, many companies do not understand the full scope and concept of agile and how it works in relation to and in contrast to lean idea. Let’s look at how the agile supply chain is quickly replacing the lean one.
What is the Agile Supply Chain?
Agile supply chain basically refers to using responsiveness, competence, flexibility, and speed to manage how well a company handles its logistics daily.
Unlike a lean supply chain, an agile one uses up-to-date information, acquired with artificial intelligence and machine learning; to leverage current operations and real-time data regarding demand forecasting, increasing the overall efficiency and productivity of the supply chain.
Another advantage of working with agility is avoiding potential shortages and eliminating overstocked inventory. Overstocked inventory is one of the consequences of the lean supply chain.
Because the lean concept focuses on making processes more effective and efficient, many companies often end up with a huge inventory of goods. However, changes in consumer demand and the increasing customization of goods have led to radical changes in consumption; and overstocking has become detrimental and recurring.
94% of the deliveries from companies that had implemented agile supply chain practices were delivered on time and in full, without keeping inventory for more than 85 days.
However, companies without agile practices often had inventory levels that remained in the warehouse for more than 108 days; and only 87% of deliveries were on time. Not to mention goods that were not delivered at all.
Advantages of the Agile supply chain
The above information provides insight into how lean concepts in the supply chain differ from the agile concept. However, in addition to exposing the differences, it is necessary to show the commonalities to understand the evolution of the concepts.
When demand and disruption were less intense there was less need for detailed planning of logistics. For instance, the lean supply chain has helped to reduce costs in many processes and streamlined the supply chain.
But it is worth remembering that the danger of the lean supply chain lies in the fact that the information obtained is not used to make a predictive and quantitative analysis of what will be needed in the future. As a result, the supply chain often has overstock problems and is unable to provide end-to-end visibility.
In addition, the agile supply chain can adapt to rapidly changing environments, such as the economy, customization, customer trends, and demands, among many other factors.
By making a supply chain capable of responding to such issues immediately, modern companies can successfully navigate supply chain disruptions.
How does Agility Benefit the Supply Chain?
Agility practices enable the supply chain to change the way processes operate. By using lean concepts, the supply chain may have improved the workflow of individual employees. But, implementing agility in the supply chain with real-time data goes further and optimizes the entire logistics process.
In addition, agility allows supply chain partners to work together to produce the number of products needed on a daily basis. Essentially, agile solutions are a means of taking the lean supply chain and improving it fostering supplier-customer-manufacturer relationships.
The power of one connection
It doesn’t help to access data if you don’t use it in planning, or when producing forecasts; all your technological processes need to work in coordination. This way you optimize your decision-making power and increase your company’s resilience.
The Grydd smart operating system is designed to integrate all your logistics processes in one easy-to-understand panel. The achievement of an agile supply chain depends on the technological innovation you have, don’t waste time and try everything we offer for free now.