A couple of weeks ago, I had the privilege of moderating a virtual Leaders in Action (LIA) event on the theme of “Next Generation Agility.”
In attendance: 25 COOs and CSCOs of large global companies, with an average annual revenue of over $50 billion. This interactive event featured three companies from different industries sharing their best practices in enabling agile supply chain teams/people, processes and technology solutions.
I mention the size of these companies because the conventional labels associated with this class of organization would more often be “complex,” “bureaucratic,” or simply “slow.” The insights revealed during our discussion couldn’t be further from those stereotypes — new products moving from concept to launch in 7-10 days and major decisions on COVID-19 response projects made within 48 hours of submittal. Traditional planning cycles that previously ran monthly, moved to a daily cadence for some.
Why Agility is Imperative, Now More than Ever
Prior to COVID-19, many of these companies were significantly reinventing their underlying businesses. They were entering new markets, radically shifting product technologies and transitioning their offering portfolios from mass consumption to mass customization. Pandemic aside, these moves would require a more agile supply chain response. Now, with our current disruption, even greater agility is required to successfully navigate in an environment of vastly different product demand patterns and supply disruptions.
I opened our session with a finding from a Gartner supply chain agility study that we ran last summer. The question revealed that there were many preferred ways to define agility and, ironically, the least common was our ability to succeed in a turbulent environment. And yet, here we are.
What Did We Learn?
Here are some of the key takeaways from the group sharing and discussion at this LIA event:
- Agility demands speed: in strategic decision making, planning cadence, and execution of product development and delivery. Many temporarily rewired their approach and processes for speed during the COVID-19 disruption and won’t look back. Some believe that only a portion of this speed is sustainable and are closely monitoring employee engagement and resilience.
- Agility promotes simplification of product portfolios, organizational structures and solutions landscapes, a common thread we heard from companies seeking agility during and post-disruption. For instance, one company stopped stocking low-volume SKUs in response to large COVID-19-driven demand on high-runner products and plans to keep doing so post-pandemic.
- The COVID-19 crisis has highlighted the need for sophisticated, institutionalized risk management, including real-time scenario planning, business continuity planning and “sense and respond” capabilities. In the aftermath, we will likely see greater flexibility in network capacity, more local and multi-sourced supply, and multi-skilling of employees.
- Self-forming/autonomous teams are proving very effective at driving greater agility on both projects and operations, in addition to improving employee engagement. New skills such as facilitation and storytelling are required of team members. Members of these teams have demonstrated extremely impressive agility, an ability to work under pressure, self-motivation and higher overall job satisfaction.
- Supply chain is walking a tightrope when it comes to investing in leading-edge capabilities and technologies that could either increase complexity and costs or completely transform the business. Knowing which to choose is a common challenge for these leaders. That said, the early adopters in our group tended to fare better in the face of COVID-19 supply disruptions. Several credited existing “control tower” capabilities as foundational to their successful response.
- Many leaders have creatively applied technologies such as virtual reality (VR), AI/Big Data and 3D printing to solve constraints driven by the COVID-19 pandemic. One company’s engineers are using VR to conduct remote equipment maintenance at international plants, isolated by local travel restrictions. This same company is using VR to train new sourcing relationship managers how to negotiate with suppliers using immersive role-playing sessions. Another company repurposed a big-data analytics tool it normally used to better predict customer delivery ETA to identify near-term supply constraints and aid in the prioritization of demand.
It was truly inspiring to hear the level of conversation and passion for such a critical topic as “Next Generation Agility.” We’re very much looking forward to the next virtual gathering of this esteemed group.
In the meantime, we hope everyone stays healthy and safe.
VP Distinguished Advisor,
Gartner Supply Chain