An Agile Supply Chain Results In Higher Profits

Companies that have learned to capture the benefits of an agile supply chain are more profitable, according to a report titled, "The Agile Supply Chain: Three High-Value Process Transformation Projects That Can Deliver Significant Business Benefits" released by Manufacturing Insights, an IDC company. Successful companies have mastered the ability to be highly efficient, maintain a low-cost structure and are quickest to market.

The report names three process capabilities that if aligned with overall business, customer and product strategies will create an agile supply chain:

  • Network-wide Collaboration & Analytics: Shift focus to a left-to-right, pull-oriented supply chain driven by actual customer demand.
  • Align and Balance Supply with Demand: Place high emphasis on incorporating demand, supply, logistics, and product design network partners in all aspects of network-wide collaboration.
  • Sense and Respond: Invest in the ability to more quickly sense unexpected events, with the ability to globally adapt and respond to them.

"The extension of the supply network, either as a response to reducing overall costs or a means for supporting broader markets or services, adds new dimensions of control, uncertainty, and potential complexity. The combined need for implementing both an agile and an efficient supply chain process capability is no longer an option. It is the competitive imperative," said Bob Ferrari, program director, supply chain strategies, Manufacturing Insights

Other findings in the report indicate that companies who invest in more mature business practices, followed by advanced IT systems, can see as much as a 75% advantage in net profitability. The report also speaks to the issue of sourcing supply chain activities in low-cost regions and warns that these activities must be balanced with the need for overall agility and responsiveness.

Manufacturing Insights

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