What is an Agile Supply Chain?

Malcolm Tatum

An agile supply chain is a chain of supply that is capable of responding to changing needs in a manner that expedites delivery of ordered goods to customers. In general, supply chain agility is a trait that many companies look for when selecting vendors, since a retail supply chain that is flexible and able to quickly respond to emergency needs can in turn help the business respond more efficiently to its customers. Along with flexibility, speed and accuracy are also hallmarks of this type of supply chain.

An illustration of a supply chain.
An illustration of a supply chain.

In order to understand the benefits of an agile supply chain, it is first important to understand the components found in any type of chain of supply. These include elements such as order collection and processing, inventory of materials to create the goods used to fill orders, packaging and transport of finished goods, and the quality of customer service that is exhibited throughout the process from the point of sale to the actual delivery and beyond. In order for the supply chain operations to be considered agile, each one of these components must be managed efficiently, and organized in a manner that makes it possible to adapt to changing circumstances.

A supply chain is an organizational system used by companies to move products from their warehouses to consumers.
A supply chain is an organizational system used by companies to move products from their warehouses to consumers.

With an agile supply chain, vendors are able to respond to shifts in customer needs with relatively little time required. For example, if a client has already placed a sizable order but finds that the items are needed a week before the projected delivery date, a vendor with a truly agile supply chain will be able to accommodate that change in the customer’s circumstances, at least in part. Working together, the vendor and the customer develop a strategy to allow the delivery of as much of the order as possible within the new time frame required. At times, this may require creative thinking on the part of the vendor, as well as the demonstration in some flexibility in terms of scheduling production time, selecting shippers, and generally looking closely at each step in the order fulfillment process to find ways to minimize the time needed to successfully complete those tasks and comply with the customer’s request.

It is important to note that while an agile supply chain is a very attractive feature, attempting to be too flexible can actually damage a business. For this reason, many companies do initiate policies and procedures designed to prevent situations that could endanger the overall operation and its relationship with the entire client base. This sometimes means invoking order minimums that must be in place in order to qualify for expedited shipping, assessing additional charges for early delivery, or similar deterrents that prevent customers from constantly expecting service levels beyond what is considered standard.

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Discussion Comments


Trucking is a very important component in an agile supply chain. Why? Trucks can transport large quantities of goods faster than almost anything else. Less-than-truckload carriers -- which can quickly send goods through relay systems -- are even faster.

I only mention this because I hear people gripe about "those blasted 18 wheelers" that are all over the interstate. I'd wager those same consumers would complain even more loudly if they had to (gasp!) wait longer to buy certain items that they want in a hurry. Until there's a better way to transport goods in a hurry, trucks are here to stay.

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