The Agile Supply Chain
A supply chain involves all facilities, functions, and activities associated with flow and transformation of goods and services from raw materials to customer, as well as the associated information flow. The supply chain is an integrated group of processes to “source”, “make”, and “deliver” products (Operations). It is a network of enterprises that must work together for a common goal. In the supply chain there must be room for flexibility and maneuverability to allow for changes in the market. If demand for a product changes there must be room for the supply chain to evolve around those changes in order to keep up with the needs of the consumer. Today the business world is using the term agility to represent that flexibility and maneuverability within the supply chain. Agility allows for improvements and simple modifications.
Agility is a business-wide capability that embraces organizational structures, information systems, logistic processes, and, in particular, mindset. A key characteristic of an agile organization is flexibility. To be truly agile, a supply chain must possess a number of distinguished characteristics besides flexibility such as market sensitivity, be network based, be virtual, and have process integration. For a supply chain to be market sensitive it must be capable of reading and responding to real demand. Most organizations such as the service business are forecast driven and therefore are able to predict need, but in a more realistic economy nothing can be exactly predicted. The predicted forecasts come from past sales reports and inventory. Depending solely on forecast sometimes gives organizations too much leftover inventory. If a supply chain is market sensitive it produces as the market determine ...