The speed in the world is growing. The changes are faster and the cycles are shorter. A discovery runs over the previous one and what was new yesterday, the day after tomorrow will be outdated. The plans are carried out less and less time, due to this constant supplanting of the old. That is why logistics agility is one of the characteristics most demanded by companies today.
The growing difficulty in predicting demand and market trends, products that last less and less before being replaced by their successors, changes in the way of consuming and buying, new technologies… All of them are forcing supply chains supply to be able to answer the question: is your supply chain agile?
What is agility in logistics
Agile logistics is what helps to face the constant changes that we mentioned before. That is, one that has internalized the capacity for change and adaptation. The one that provides solutions to sudden changes in demand, the one that is coupled to new demands in very short periods -such as changes in the design of products or in their marketing, or the introduction of new logistics services- and the one that finds the way to be competitive in the face of continuous changes in the market and customers.
These are some of the attributes that define agility in a supply chain.
If we do not want to be overwhelmed by change, the first step is to be able to detect what is happening in our environment. What changes are taking place, what does it mean, how can it affect us, how can we take advantage of them and, even more, how could we lead this change? No company wants to be the last to embrace the new, be it the challenge of omnichannel or, in the coming years, knowing how to use advances like Big Data.
An agile company will never be one that continues to work as it did years ago, with its back to the world, confident that the formula that once worked for them will work forever.
Fluidity and transparency
A supply chain is made up of many links. These links may belong to the same company (the different departments, centers, offices or countries) or to different ones (relationship between client and logistics operator, between different transport and logistics providers, distribution centers, distributors, etc.). And, in turn, this relationship can be efficient and transparent or opaque and bureaucratic.
When your logistics have problems quickly knowing the status of shipments or any other type of data that they would need to access easily (stocks, demand forecasts, delivery notes…) they will be moving away from this concept of agility.
Whether you have thousands of customers and suppliers around the world or are more humble in size, your supply chain needs to create an effective system for sharing information that contains what is known as a “single version of the truth.” In other words, that the data is common to all those who need it and that there are no distortions between the different protagonists. These differences with respect to the “truth” often lead to errors that are very expensive to correct, such as considering that we have enough inventory when, in fact, we are about to suffer a stock-out.
Having the necessary information and being able to detect changes will not be enough if we don’t get started. On many occasions, a supply chain fails in logistics agility by not being able to execute the measures that it is capable of thinking about or detecting.
This problem is especially acute in larger companies, which have a tendency to slow down decisions and ideas. Committees, middle managers, meetings, evaluations, reviews, more meetings… The perfect cocktail so that changes do not occur or so that they do when it is too late.
Is your logistics capable of making important decisions quickly, or every time a possible change appears, the first thing you think about is how difficult it will be to make a decision about it?
Agile companies have agile processes
Once again, making decisions is not enough either, since we must be able to turn those decisions into real changes. Imagine that you decide to change your distribution strategy and, instead of distributing from a single centralized point, you bet on creating local distribution centers. Do you think your company would be prepared to make this change in a short time? Could you go from selling through a single traditional channel to opening, for example, an online marketing channel?
You can ask yourself the same thing for the adoption of new technologies -machine learning, blockchain…-, new trends in the market, changes in products, new delivery times, etc. The case of Apple is famous, which when there was barely a month left for the launch of the original iPhone, decided to make a change to the screen. That is to say, a challenge for the manufacture and distribution of a product with different specifications that it was able to assume successfully. Being able to execute these changes is what demonstrates the logistical agility of a company.
This feature is closely related to the ability to transmit and share information, since the larger a supply chain is, the more elements must be able to work in common. If the efforts in your supply chain resemble a bureaucratic process and have more paperwork than actual management of what happens, you should raise the alarm bells.
Agile companies have agile processes, based on having the necessary data and having mechanisms that allow the necessary decisions to be made and implemented. It is common for the search for low-cost logistics, which can be efficient when everything goes well, to face problems when the unpredictability of which we have spoken makes an appearance, due to the lack of systems that encourage innovation and response capacity. before the change.
Logistics agility, by making us respond earlier and better to our environment, allows companies to better meet the requirements of their customers and increase profits in the long term. In addition to being able to react better to the unexpected: political changes such as Brexit, environmental disasters, large acquisitions or corporate mergers, the need for change in logistics providers (bankruptcy, loss-making services, etc.), new regulatory frameworks and an endless number of other possible turbulence.