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The agile supply chain senses and responds to changes in demand quickly, easily, predictably, and with high quality.
While it is easy to gain agreement on the need for supply chain agility, it is hard to agree on what it really means or how to measure it. The problem is threefold: the definitions of agility vary considerably, they are confusing and contradictory, and there is no tie to definitive measurements.
When you peel away the word and look closely, you often find that the discussion is really about production flexibility, or supply chain speed, or lean manufacturing, or any one of a number of other possibilities. Moreover, despite much being written on supply chain agility, companies still struggle with how to measure it efficiently. How can you know how agile your supply chain is? In this article, we define the concept and offer a structured framework for measurement.
To start, the dictionary definition of agility provides some interesting insights: moving quickly and easily; characterized by quickness, lightness, and ease of movement; nimble.
How do terms like "moving quickly and easily," "lightness, and "nimble" translate into supply chain management? Companies need to move quickly and easily in concert with changes in demand. Below we define four dimensions that together make up supply chain agility. Each by itself is not enough; it s the combination that defines supply chain agility.
* Speed: First, it s about speed-the speed with which you can sense routine and unanticipated demand at consumption and effectively broadcast the signal for an intelligent supply chain response. For example, how long does it take your company-not just your marketing organization but your supply chain organization-to see true (real-time) demand as it's happening in the channel or at your end customer? How long does it then take your supply chain to respond?
* Ease: But, of course, it's about more than speed. It's also about how nimble you are when things don't go as expected, how easy it is for you to sense the change and move in response to it. The most agile...