How Organizations Can Use Analytics for Supply Chain Agility

by | Jan 19, 2023 | Manufacturing & Supply Chain

Reading Time: 4 minutes

When the pandemic hit, the companies that found the most success were the ones that could pivot the most quickly. Instead of closing their doors and waiting for people to dine out again, some restaurants sold some of their ingredients for customers to make food at home. Some in-person activities – like fitness centers or escape rooms – changed their operations to a live interactive experience using an app like Zoom. Retail stores began offering curbside pickup.

Some organizations were able to pivot production because they had the materials available, which is how breweries began to make hand sanitizer, for example, or an engine filter factory began churning out masks. Creativity helps when a disruption hits. But you shouldn’t have to rely on a lucky alignment of circumstances for ways that your business might survive an interruption. It’s not too late to put a system in place so your organization can get an idea of what to expect the next time the unexpected happens.

Study overview

The Council of Supply Chain Management Professionals (CSCMP) recently published an article in its Supply Chain Quarterly that laid out some advice for how companies can think about investments in supply chain agility. The researchers worked with the University of Tennessee’s Advanced Supply Chain Collaborative (ASCC) to interview dozens of supply chain executives across a number of industries. They developed a framework that breaks agility into three broad categories: digital, physical, and process.

The researchers advise organizations to look at the money spent on making a supply chain more agile as investments rather than solely as expenses. The idea is to prepare for some kind of change, not a specific event, and doing so should always be part of the organization’s goals. Digital agility is one of the areas in which companies might focus on how much they might be investing, but it is also the one that has the potential to make the biggest impact from top to bottom within an organization.

Digital agility

“Broadly speaking, digital agility refers to a company’s ability to leverage information flows to improve and speed decisions,” the researchers write. “Digital agility is reflected in, for example, a company’s ability to ensure real-time flows of high-quality data, generate insights into potential disruptions and opportunities, and develop the talent needed to leverage digital tools across the supply chain.”

The researchers cite IBM as an example of a company that already had supply chain visibility when the pandemic hit. It knew when materials were not able to be shipped and could already get into executing workarounds while competitors were still at the first step of trying to identify their own supply chain breakdowns.

Any organization has the ability to do something similar, with the right tools. By following best practices, including all stakeholders in the process of selecting the right tool, an analytics solution can provide the real-time flow of high-quality data offering visibility into every level of the organization’s supply chain. The analytics can help map supply chains, plan scenarios, and give real-time insights into potential issues or opportunities.

A combined effort

The researchers stress the fact that they are providing a framework because there is a lack of practical advice as to how companies should be thinking about agility investments. Addressing one area – digital, physical, or process – alone can help, but really it’s the ability to connect all three that will keep a company from having to start from zero in the face of a disruption.

One factor that comes up multiple times is people-related. Within the digital category the researchers emphasize having the right people in place to be able cover all of the necessary skills involved in managing a digitally agile supply chain, including the important step of understanding and acting on the insights the data provides. Within the physical and process categories, the relationships with suppliers and other people involved along the supply chain makes it easier to make adjustments if and when the time comes to do so.

The pandemic itself might not have been predictable, but preparing for the kinds of supply chain disruptions that resulted is not impossible. With the right tools in place, companies can develop a plan that can help them respond immediately if they suffer an interruption to one aspect of their supply chain, rather than having to wait to identify the issue and then come up with a strategy. This research provides a framework for the organizations that are just getting started in that area. As always, so much of the work involved relies on choosing the right analytics solution.

John Sucich
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