Global shifts in trade, manufacturing, and consumption have given rise to super-dynamic and agile supply chains, demanding near-real-time insights for faster decisions.
Some voices draw parallels between today’s supply chains and the split-second dynamics of stock markets. But does this analogy hold weight? What defines true supply chain agility? And how can businesses adjust to this new reality?
The analogy of the stock market vividly illustrates the challenges faced by today's supply chains. Similar to journalists who rush to publish news stories without fact-checking, supply chain planners are pressured to react within seconds to consumer demands and market changes. There are plenty of examples on social media platforms like X (previously Twitter), where the need for speed sometimes overshadows the need for accuracy, posing the risk of spreading misinformation.
Much like the rapid news cycle, supply chains are adopting trends like mass customization and same-day delivery. Think of how shoe manufacturers are now able to personalize sneakers with unique designs, logos, or even your pet's name — all without increasing lead times. They can do so not only because they developed a faster and more flexible production apparatus, but they also use shorter planning cycles.
However, it’s important to clarify that while supply chains are becoming more adaptable, they still aren’t as dynamic as the stock market. While consumer behavior may seem as unpredictable as that of stock market speculators, the mechanism required to meet consumer demand is inherently less flexible.
Being agile in the supply chain context means having the ability to be flexible where possible while maintaining economic viability. A wide range of options are available to achieve this. For example, appropriate buffers of intermediate material such as soles, lacing, or heels can be set. Alternative sourcing routes can be developed. Demand can even be shaped using promotional tactics. And so on.
But more flexibility doesn’t mean that every little change to a plan needs to be disseminated across the supply chain in real time. For instance, it would be rather unwise to recalculate upstream buffers based on real-time feedback from the shop floor. You don’t want to agitate your inventory planning that much, as that would be very costly. Instead, you can better aggregate feedback data to a level that aligns with the time horizon of your specific plans, whether they’re quarterly, monthly, weekly, daily, or hourly volumes of various types.
So, the question arises: Do modern super-dynamic supply chains truly require real-time agility? From my perspective, the answer is no. Supply chains benefit more from what I would call “agility at the speed of the business”. This type of smart, reality-based agility leads to smart, reality-based plans.
After building experience in master data and project management for seven years, An turned to technical writing. Her focus is on user manuals and training materials for the basics of the OMP Solution.