Introduction
For many decades, companies have concentrated their procurement practices around a lean supply chain. However, today’s competitive business landscape requires a system of a new kind. Currently, lean supply chains are not meeting the high demands of consumers or serving the unpredictable environment. Consequently, companies have shifted their focus from saving costs to increasing customer satisfaction, making the modern supply chain more and more complex.
Also, technology innovations such as cloud computing, augmented reality, IoT, and artificial intelligence are transforming the way the supply chain functions. Companies unable to keep pace are subject to missing out on a plethora of profitable opportunities. To prevent this from happening, companies across the globe are considering the agile supply chain, a practice centered on highly flexible and adaptable production.
Below, we share the top 3 reasons supply chain professionals should implement an agile supply chain practice into their enterprise manufacturing:
1. Adaptive Capacities
Adopting agile supply chain practices enables companies to effectively manage market volatility, shifts in the economy, adaptations in technology and equipment, and changes in other parameters. Rather than relying on monthly or quarterly forecasts, organizations can quickly adapt to changing market conditions and produce the correct amount of goods needed daily.
2. Mass Customization
Consumer preferences have drastically shifted since the beginning of consumerism. Back then, mass-produced, low-cost products were preferred. Fast-forward to today, and companies are creating individualized products based on personal characteristics and preferences. Just take Coca Cola personalized name bottles. By adopting agile supply chain practices, companies can respond to changing customer preferences rapidly and implement e-commerce personalization on a feasible scale.
3. Low Inventory Operations
When it comes to procurement, maintaining high levels of inventory has its share of risks. For one, the potential for stock obsolescence and spoilage is much more likely, and two, high levels of inventory freezes the company’s capital resources. The fashion industry is one particular industry where the dangers run high. Fashion collections become outdated each season, forcing retailers to sell inventory at substantial discounts. However, Zara, a leading fast-fashion retailer, has adopted the agile supply chain practices and has been able to maintain low inventory and replenish stock fortnightly as a result.
Conclusion
Agile supply chain practices can drastically enhance performance in industries compared to a lean supply chain. Considering today’s market is fickle, and customer demand is continually evolving, there is a high level of need for supply chain modernization. An agile supply chain will help you get there.
For further information, visit Katalyst Software Services Limited to begin your transition towards an agile supply chain.
