What is the Agile Supply Chain?
Gone are the days when organizations could plan ahead with some degree of certainty. Demand-driven organizations strive to respond to known customer requirements and to do this in even shorter time frames. Now achieving this level of responsiveness requires agility here comes agile supply chain
An agile supply chain is define as one that is flexible and adjustable to meet unexpected needs.
As we know, agility refers to speed and efficiency. And an agile supply chain is focused on speed, cost, efficiency, responsiveness, flexibility, and productivity in the production and delivery of goods. Agile supply chains rely on real-time data. It helps to help make decisions in day-to-day operations as well as projected data in supply forecasts. Combined, it creates a more robust process that saves businesses and consumers money, eliminates waste of excess inventory, foresees potential shortages, and does it all quickly and productively.
However, agile supply chains are not suitable for all organizations. And in some instances, technical or human errors can restrict acidity. A deeply embedded culture or lack of investment in enabling technologies can also restrict the success of agile supply.
Agile supply chain management is a supply chain widely recognized reorganization around you. Structures value chain configurations, communication and information systems, and a whole new mindset when it comes to supply chain should update.
Now let us see an example:
H&M supply chain
H&M Supply chain strategies have played a major role in revolutionizing the fast fashion supply chain as consumers grew increasingly concerned with sustainability and responsible sourcing. The company supply chain has led to reduction in lead time and waste while adhering to high sustainability standards.
One of H&M’s hallmark has been shifting from traditionally heavy fronted heavy foot printed world of fast fashion to more sustainable version. The company has attacked this from several angles, including.
- Cleaner materials and energy.
- Better demand and planning to reduce waste.
- Trace ability of raw materials.
- Sustainable source of raw materials.
- Minimize packaging.
- Collection of unbuttoned clothing for reuse or recycling at retail locations
This company used several strategies for the agile supply chain like artificial intelligence, outsourcing speeds, production, inventory management, etc.
Inventory management has been a historical issue for H&M and fast fashion in general . With the retailer accused of burning 12 tons of unwanted clothing in 2017. When retailers must plan several season in advance, usually time, it can be difficult to predict consumer behavior at the time of lines in lease H&M moved to solve this problem through better demand planning, assisted by leveraging modern technology combined with hard earned experience, the company has greatly improved his forecasting and demand planning.
Talking about the artificial intelligence, h&m has implemented artificial intelligence functions across several segments of the company. The Organization advanced analytics and artificial intelligence team is dedicated to finding new applications for AI and predictive technology. Artificial intelligence driven improvements include more precise demand focused more sustainable business decisions and waste reduction.
To compete in ever changing fashion retail market at H&M will need to continue to develop supply chain, agility and flexibility. Building a more agile supply chain will require finding ways to further cut down lead times drives continuous improvement in boosted demand planning and find innovative ways to avoid waste.
As companies work to build supply chain resilience and agility in their supply chains in light of pandemic as well as growing pressure to improve sustainability .
Hand picked for you– transportation in supply chain
Zara supply chain approach
- Procurement method –
Zara s procurement team does not work on the number of finished clothes. It works on the quantity of raw materials needed to manufacture clothes . Hence, This helps in reduction of waste materials and you can reuse the fabric
Supplier relationships are key suppliers are all close to Zara factories and collaborate tightly so Zara can order on everyday basis
- Spare capacity –
Zara voluntarily keeps up to 85%of its idle in order to optimize the response to demand. And, another interesting approach is quite different to competitors that try to maximize utilization
Zara s approach is certainly untraditional and has several it well . supply chain leaders should assess whether specific aspects are are as suitable to their business as to Zara
So, these were some strategies used by these two well renowned companies for supply chain management
Check out this video-
What is agile supply chain with example?
An agile supply chain can be defined as one that is flexible and adjustable to meet unexpected needs. H&M Supply chain strategies have played a major role in revolutionizing the fast fashion supply chain as consumers grew increasingly concerned with sustainability and responsible sourcing. The company supply chain has led to reduction in lead time and waste while adhering to high sustainability standards.
What is an example of agile supply?
Zara supply chain approach
Zara s procurement team does not work on the number of finished clothes but on the quantity of raw materials needed to manufacture clothes . this helps in reduction of waste materials and you can reuse the fabric . Supplier relationships are key suppliers are all close to Zara factories and collaborate tightly so Zara can order on everyday basis .
Zara voluntarily keeps up to 85%of its idle in order to optimize the response to demand .another interesting approach is quite different to competitors that try to maximize utilization
- Customer-centricity, or a focus on the needs of the customer and the development and customisation of products in a timely manner to accommodate those needs.
- Cooperation and adaptability: Form solid alliances with suppliers and distributors to facilitate quick responses to shifts in the market.
- Quick product introductions, demand-driven production, and effective inventory management are just a few examples of how companies like Zara, Apple, and Amazon demonstrate an agile supply chain strategy.