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after the recession Figure 4: Look at the whole chain – procurement process has much more impact than logistics technique. chain view that understands where both costs and delays build up, what causes them and how they may be overcome. The Agile <strong>Supply</strong> <strong>Chain</strong> Agility has been a staple of supply chain preaching for a while, but I am unsure that it has been properly recognized. Typically, at least for supply chain professionals, this has meant using often-expensive resources (airfreight, for example) to maximize the ability to get merchandise into the market in which the demand exists. But, actually, as we can see in Figure 4, classical logistics activities have but a trivial impact on overall lead times, and are in many cases about as slick as it is reasonable to expect. Instead, we need to focus on procurement and manufacturing. This is where the gap between an emergent demand and the ability to supply that demand really lies. Of course, in an ideal world, procurement, manufacturing and logistics would all be part of an holistic supply chain ‘view.’ But, as we all know, that situation is still fairly rare. So, my advice is necessarily aimed at logisticians, and can be summarized as follows: • Your own logistical actions aren’t going to save the company: you need a co-ordinated response across the supply chain. • Take action now. • Don’t ship to market until the market is there. 26 classical logistics activities have but a trivial impact on overall lead times, or are as slick as it is reasonable • While you are managing for survival, plan for the upturn: if the notorious ‘green shoots of recovery’ appear, have you got stock in manufacture, in transit or in store, that can fertilize those shoots, and are the lead times such that you can capitalize on the upturn? Your competitors may have. • That suggests that it may be worth paying more (or at least not cutting back) on agility: look at the right areas of your supply chain, particularly suppliers and procurement; how do you commission suppliers, deal with them, pay them and keep them on your side. • Retaining future logistics capacity (even, perhaps, if payments seem excessive against current rates and activity) may be critical. And, finally, I am certainly not advocating that we abandon Far Eastern (or other LCC) supply sources; but we do need to drastically improve, with the suppliers’ cooperation, lead times, and this is absolutely the right time to be doing it. • Simon Butcher For more information Simon Butcher is a Principal at Crimson & Co., supply chain consulting (www.crimsonandco.com). www.scemagazine.com may/June 2009
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