From my childhood, I distinctly remember Muhammad Ali, the American professional boxer widely regarded as one of the most significant and celebrated sports figures of the 20th century.
“What made Ali such an outstanding exponent of his sport? It certainly wasn’t sheer strength and power … Rather, Ali’s speed, agility, footwork and general athleticism were among the attributes that most distinguished him from other competitors.”
In sports, agility is the ability to change the body’s position efficiently, requiring a combination of several characteristics:
- Responsiveness: Reacting quickly
- Adaptability: Adjusting to new conditions
- Coordination: Orchestrating all different moving parts
- Speed: Moving quickly
- Flexibility: Bending easily without breaking
- Balance: Maintaining equilibrium
Learning Agility From Sports
As in sports, many large corporations have traditionally been built for sheer strength and power rather than for agility and athleticism. This takes on many forms. There are hierarchical organizational structures, with people’s skills focused on functional specialism. Long new product development times aim to develop products lasting for many years. Solid factories mass produce for a market open to undifferentiated, standard products. This traditional supply chain foundation clashes with the reality of today’s fast-paced marketplace, and for many companies strength and solidity have become a penalty rather than an advantage.
Would supply chain benefit from these same six characteristics of agility? Survey respondents from our Supply Chain Agility 2019 survey provide a clear opinion. Yes, the six characteristics of agility in sports are also relevant for creating more agile supply chains. Not only that, but all six are important to have. Supply chain agility is emerging as a complex, multi-faceted capability.
Learning From Leaders
To be agile, supply chain needs to show the following characteristics:
- Responsiveness — Supply chain conditions are constantly changing and the quality of reacting quickly to any relevant fluctuation is an essential characteristic. Caterpillar, for example, set up the Assurance of Supply Center. It continuously monitors supply chain conditions and identifies and prevents supply issues impacting customer orders.
- Adaptability — Adaptable supply chains are able to adjust their configuration to meet changed requirements. For example, the United Kingdom grocer Morrisons invested in demand sensing technologies to improve short-term forecasting and reinvigorate daily replenishment orders based on store-specific influences, including consumer buying patterns, promotions and weather conditions.
- Coordination — Supply chains are complex and made of a number of different moving parts. The ability to coordinate and orchestrate the end-to-end supply chain is essential for successful global organizations. Mondelez, for example, adopted end-to-end platforms and created standards that are agreed and adopted by a cross-functional, integrated organization.
- Speed — The ability to move fast is a winning characteristic for any supply chain. German online fashion retailer Lesara, for example, regularly scans social networks and competitors’ webpages to assess what products are trending. These insights are then leveraged so that a new product concept can be taken from design, through production and made available for sale in as little as 10 days.
- Flexibility — Having a flexible supply chain means the ability to temporarily stretch it to meet unusual conditions. Colgate Palmolive, for example, specialized each global factory on specific product categories. However, to create flexibility, factories have dual capacity allocation for global and local markets, which are swung according to demand fluctuations.
- Balance — Successful supply chains are able to maintain equilibrium by continuously balancing supply capabilities and customer demand. Nokia, for example, has focused on increasing its sales and operations planning maturity, initially to develop a more integrated and agile demand planning process. More recently, it has invested in increased supplier collaboration and integration into the end-to-end planning process.
There isn’t any strategic supply chain transformation nowadays that doesn’t include agility as a key target. However, for many of these strategies agility is often just a buzzword, sometimes seen as the panacea to all possible supply chain issues.
Many supply chains are staking their future on being something that isn’t totally clear. Therefore, we felt the need to develop more research about defining what agility is and illustrate how supply chains are dealing with this expectation. Clients should check out the next executive report for more on this issue.