Agility in Supply chains - the best local and global practices

Individual enterprises no longer operate as independent entities in today's global competitive context, but as supply-chain networks. In this new competitive world, the capacity of management to integrate the company's extensive network of commercial contacts is more important. Supply-chain management (SCM) allows you to capitalize on the synergy of intra- and inter-company integration and management. SCM is concerned with entire business-process excellence and represents a new approach to managing the company and relationships with other supply chain participants.

Top-performing supply chain have three characteristics. For starters, they are quick to respond to rapid changes in demand or supply. Second, when market structures and environmental factors change, they adapt. Third, they coordinate the interests of all supply-chain network participants to enhance performance. These characteristics—agility, flexibility, and alignment—can only be achieved when partners encourage knowledge flow across supply-chain nodes. In other words, information flow is what allows a supply chain to come together in such a way that it generates a genuine value chain for all stakeholders. Knowledge flow adds value by increasing supply chain transparency and providing everyone with a greater understanding of customer demands and value offerings.

From Push to Pull of Supply Chains

Raw material suppliers define one end of the supply chain in the traditional supply-chain concept. They were linked to manufacturers and distributors, who in turn were linked to retailers and end users. Although the client is the source of income in this "push" approach, they are only one component of the equation. Customers, merchants, distributors, and manufacturers were all involved in the order and promotion process, which took time. By the time customers' needs were processed through the agendas of all supply chain partners, the output cycle was benefiting suppliers just as much as customers.

Whereas in the old "push" model, many supply chain participants remained relatively separated from end users, under the new "pull" model, each component is racing to build direct electronic links to the final customer. As a result, electronic supply-chain connection enables end consumers to become more educated by allowing them to investigate and direct providers. As a result, customers now have a major involvement in how the supply chain operates, and businesses may better service customers' requirements, carry less inventory, and get items to market faster.

Supply-Chain Management

Supply-chain management (SCM) is a comprehensive business-process concept that focuses on generating synergies by achieving excellence in integrating and managing a firm's network of interactions among and between all of its supply chain members. consists of three major components:

(a) constructing the supply-chain network structure

(b) designing supply-chain business procedures

(c) managing supply-chain operations.

The supply-chain finance network structure is made up of member businesses and the ties that connect them. All autonomous enterprises or strategic business units that carry out value-adding activities in business processes designed to deliver a specified output for a specific client or market are primary components of a supply chain. Supporting members are businesses that merely give resources, information, utilities, or assets to the supply chain's major members. Firms that lease vehicles to manufacturers, banks that lend money to retailers, or companies that offer manufacturing equipment, print marketing brochures, or give administrative assistance are examples of supporting companies.

Business processes are actions that generate a certain value output for the client. The managerial role Integrates important business processes and services throughout the supply chain to form an efficient value delivery network. connects corporate operations across the supply chain Historically, many organizations did not successfully integrate the upstream and downstream elements of the supply chain. Today, competitive advantage is increasingly dependent on integrating eight key supply-chain processes into an effective value delivery network: customer relationship management, customer service management, demand management, order fulfillment, manufacturing flow management, procurement, product development, commercialization, and return management.

In terms of the supply-chain management function itself, some organizations stress a functional structure, while others favour a process structure, and yet others emphasise a hybrid structure of processes and functions. The number of business processes that must be integrated and managed between firms will most likely vary. In some circumstances, linking just one major process may be suitable; in others, linking several or all critical business processes may be appropriate. However, in each situation, executives must extensively assess and discuss which crucial business processes to integrate and control.

Supply-Chain Agility

The finest companies have supply chains that can adjust to market changes that are quick and unexpected. Agility, the capacity to adapt quickly and cost-effectively to unexpected change. —the ability to respond swiftly and cost-effectively to unexpected change—is crucial since demand and supply fluctuate more frequently and widely than they used to in most sectors. The most successful businesses leverage agile supply chains to distinguish themselves from competitors.

Agility and resiliency have been increasingly important in recent years as supply chain disruptions have become more common. Many companies supply chains were interrupted by the terrorist attack in New York in 2001, the dockworkers' strike in California in 2002, and the SARS pandemic in Asia in 2003, for example. Agility and resiliency help supply chains recover more quickly from such sudden setbacks.

Supply-chain agility and resilience are more than just the ability to manage risk. It currently implies that the capacity to manage risk entails being better positioned than rivals to deal with – and even benefit from – disruptions. Building flexibility into the supply-chain structure, operations, and management is critical to boosting agility and resilience. Another key aspect of supply chain agility is ensuring that sufficient liquidity is made available across the value chain. This helps businesses manage key risks such as non-payment, credit, counterparty, etc, which will in turn allow all stakeholders to build strong relationships and drive business growth sustainably.

Making Supply Chains Adaptable

When markets or tactics change, global organizations must be able to modify their supply networks. The greatest businesses customize their supply networks to the characteristics of the markets they service. They frequently end up with many supply chains, which can be costly, but in exchange, they get the greatest production and distribution capabilities for each offering.

Companies that compete largely on operational excellence often focus on developing supply chains that provide goods and services to consumers as swiftly and cheaply as feasible. They invest in cutting-edge technology and use metrics and reward systems to improve supply-chain performance.

A focus on efficiency is insufficient for organizations competing on client intimacy or product leadership—agility is essential. Consumer-centric businesses must be able to add and remove products and services as customer demands change; product-centric businesses must be able to adjust their supply chains to technological developments and profit from new ideas.

To create a sustained competitive edge, all businesses must match their supply-chain infrastructure and management with their core value offer. That is, they must align the interests of all enterprises in the supply network so that companies maximize the performance of the chain when they maximize their own. Businesses should start looking into potential digital solutions to enhance various aspects of their supply chain operations from sourcing, manufacturing, inventory management and financing. Digitalisation is key to transforming their existing business from “Just-in-time” to “Just-in-case”.

Finance and supply chain

These two key business tasks communicate in distinct languages and inhabit different universes. In their ways, each contributes significantly to their organization’s growth and prosperity. Manufacturers must get them to synchronize if they are to succeed and survive — and acquire the agility and resilience that everyone seeks after the pandemic crisis.