Agility (or Agile)) is a key word in many of the last decade’s Supply Chain articles.
It is usually defined as the ability to respond to unanticipated changes (Sheffi, 2004). The focus on a supply chain view of agility has emerged since, 2001, initiated by (Van Hoek et al. , 2001). Respond to short-term changes in demand or supply quickly and handle external disruptions smoothly are the main objectives of an agile supply chain (Lee, 2004).
One may mistake agility for other similar, but different capabilities, especially adaptability and resilience. Adaptability deals with deeper, mid-term changes. Adaptable supply chains adjust their design to meet structural shifts in markets and modify supply network to strategies, products, and technologies (Lee, 2004).
See the following figure for an illustrated difference between agility and adaptability.
As for resilience, it aims at mitigating identifiable risks and ensuring business continuity, while agility is being able to deal with and take advantage of uncertainty and volatility. The resilience could be defined as the ability of a system to return to its original state or move to a new, more desirable state after being disturbed (Christopher and Peck, 2004).
Differences between agility and resilience are depicted in the following Table.
To achieve a high level of agility, a supply chain has to acquire some key capabilities. The aim of this section is to illustrate all the facets of agility that have to be worked on.
The House of Supply Chain Agility (see following figure) summarizes the main components, which enable the supply chain to be agile from our point of view. It has been built thanks to a large literature review on agility. Many authors have already listed one or more capabilities associated with agility.
According to (Christopher and Towill, 2000), a key characteristic of an agile organization is flexibility.
In other words, supply chain agility is an externally focused capability that is derived from flexibilities in the supply chain processes (Swafford et al., 2006).
They thus assert that “procurement/sourcing flexibility”, “manufacturing flexibility” and “distribution/logistics flexibility positively impact supply chain agility”. Manufacturing flexibility is broken down in four competences (machine, labor, material handling and routing flexibilities) and two capabilities (volume flexibility and mix flexibility) (Q. Zhang et al., 2003).
For the purpose of our study, we have used the classification advanced by Slack and study four flexibility capabilities: product flexibility, mix flexibility, volume flexibility and delivery flexibility (Slack, 2005). Studies focused on agile manufacturing are extensively available in the literature. See (Yusuf et al., 1999), (Sharifi and Z. Zhang, 1999) and (Giachetti et al., 2003) among others.
House of Supply Chain Agility
Consequently, flexibility is a requirement to achieve supply chain agility.
It is therefore represented as the foundation of the House of Agility. Although fundamental, it is not the only capability needed to achieve supply chain agility. Enhanced responsiveness is also a major capability of an agile supply chain (Stevenson and Spring, 2007).
Two other key ingredients of agility are visibility and velocity (Christopher and Peck, 2004). A complementary capability is listed by Okongwu et al., for whom agility in a supply chain is the combination of effectiveness and responsiveness in a flexible environment (Okongwu et al., 2008).
To better organize the framework, we will order things as shown in the following table: flexibility is broken down in four capabilities (volume, delivery, mix and product flexibilities); responsiveness in three capabilities (reactivity, velocity and visibility); and effectiveness is broken down in completeness and reliability. All of them enable to provide a quick and adequate response to short term changes.
From those reflections, we define supply chain agility as the ability to respond quickly and adequately to short-term changes in demand, supply or environment. It derives from the supply chain’s flexibility, responsiveness and effectiveness.
Auteurs : Matthieu LAURAS, AGILEA / Aurélie CHARLES, Ecole des Mines Albi