Increasing Your Supply Chain Performance Through Visibility, Velocity and Agility

by Joe LaMantia and Ron Quick

Visibility, velocity and agility are core qualities of excellent supply chains. To address all three factors effectively, businesses need to apply a coordinated strategy. A lean approach to the supply chain can improve these three connected concerns, delivering benefits that build on each other and strengthen the supply chain.

Basic improvement strategies for these three supply chain attributes

1. Visibility:

Supply chains continue to grow, encircling the globe. That means companies need to address issues ranging from different languages and time zones to cultural distinctions, regulatory requirements, and the sheer distance involved in working with suppliers and customers thousands of miles away. Visibility on an internal level is also important. Manually updated spreadsheets, hard copies and similar tools lead to fragmented, limited insight and complicates access to current, accurate information. Situational awareness and management by exception allow businesses to target issues that require attention and action on the part of buyers and planners.

Key visibility action points:

• Addressing complex factors with a thoughtful, measured approach and with powerful, integrated tools that increase visibility.
• Decreasing supplier lead time using appropriate tools allows business partners to plan ahead and act immediately.
• Sharing of information in a more streamlined fashion.
• Ensuring key information about performance, such as lead times, expected versus actual time delivery and other data, is available to the right stakeholders whenever it’s needed.

2. Velocity:

The speed at which the supply chain operates has a direct connection to business performance and customer satisfaction. Customers not only enjoy short delivery time frames, they increasingly grow to expect them as business giants like Amazon continue to reduce the time it takes for a shipment to reach its intended destination. Traditional processes that rely on manual, labor-intensive actions can only slow down organizations. Supply chains must support higher levels of velocity.

Key velocity action points:

• Implementing tools that emphasize automation and require less interaction from staff while facilitating the sharing of information with stakeholders.
• Reducing inventory and improving response time with the right systems in place.

3. Agility:

Making effective changes when faced with an unpredictable issue or event is a hallmark of an agile supply chain. While companies can’t predict when issues will arise, they can implement tools that will allow them to respond quicker.

Key agility action points:

• Focusing on scenario planning around identifiable issues, both domestically and abroad, whether man-made or caused by nature.
• Training the employees who will play key roles in terms of rerouting shipments or contacting alternate suppliers when a problem like a natural disaster, political event or labor strike arises.
• Implementing new tools and procedures to maximize responsiveness and effectiveness.

The common thread connecting visibility, velocity and agility is that improvements in each area help businesses offer better customer service and build better long-term relationships.

Moving past common issues with a change management strategy

Problems related to limited visibility, velocity and agility can have a number of negative outcomes, including:

• Production disruptions due to unforeseen part shortages.
• Premium transportation costs – inbound and outbound.
• Late customer deliveries.
• Customer order errors (wrong parts, under/over shipments, etc.).

To address these problems, and realize the improvements detailed previously, business leaders need to guide their organizations through a thoughtful change management process. To be truly effective, this commitment to improving visibility, velocity and agility must start with executives. Because they have a big-picture view of current operations, they can guide the effort and identify areas where change may prove to be especially disruptive for current workflows and frontline employees.

Setting the strategy and objectives, and communicating the reasoning behind planned changes, reduces pushback and makes the priority of the initiatives clear. Designating specific employees to lead a change management team and making that work a priority is a crucial step early on in this process.

To keep such a program moving along smoothly and ensure its goals are effectively reached, company leaders should empower the change management team to:

• Identify specific objectives and the paths toward them.
• Provision the necessary resources and ensure they have access to them as needed.
• Implement specific changes whenever necessary.
• Test results and make any adjustments.

This approach helps to ensure the initiative consistently moves forward and avoids stagnation.

Another important consideration for executives is building a strong internal culture around change. When the value of such change is made clear, employees are less likely to resist.

Identifying and celebrating short- and long-term supply chain improvements

Pointing out how a new system or process can address a common pain point is one of the easiest ways to encourage its adoption. The leaders of change management efforts should identify the quick wins – the improvements that are quickly realized – by highlighting and celebrating them. This, in turn, empowers frontline staff and makes it clear that more improvements are coming.

One common positive change seen early on, through better visibility of data and increased agility is better management of supply chain disruptions. With the right tools in place, it’s easier to identify shortages of key components and reduce the stress felt by employees who are in charge of finding solutions. Other early advantages include:

• Fewer production disruptions.
• Reduced manual effort.
• Faster decision-making processes.

Longer-term benefits include:

• Lower supply chain inventory.
• Better ability to handle changes in demand.
• Closer relationships and better collaboration with suppliers.
• More efficient operations in both the supply chain and production.
• Decreased supply chain costs, such as expediting and transaction processing.
• Enhanced marketplace success.

Companies that take this approach to improving supply chain performance should be ready to:

• Provide consistent attention to the effort over time.
• Make changes even after new tools are in place and more effective processes show their worth.
• Make continuous improvement using a lean supply philosophy.

With this mindset and the right tools, businesses will continue to realize the benefits of enhanced visibility, velocity and agility in the supply chain for many years to come.