Tips on introducing flexibility in your supply chain
Flexibility in the supply chain is not only realistic but increasingly desirable. In 2010, Dan Gilmore, editor-in-chief of supply chain digest said that: ‘The overall pace of change and the level of dynamics in everything (…) are at all-time highs. Add in the continued reduction in product lifecycles, and the need for greater flexibility becomes pretty clear.’
When Gilmore wrote this quote, the world was still recovering from The Great Recession. Seven years later, the environment is still volatile and we face further uncertainty in the future.
Flexibility refers to an organisations ability to meet their customer’s needs cost effectively and within the right time frame regardless of the market conditions. For field service companies, flexibility is a key component of long-term profitability. Not all issues will cause a halt in operations, but a rigid supply chain will not be able to react to changes quickly and will incur higher cost or dissatisfied customers.
Improving flexibility is an ongoing process and there are no easy fixes. However, there are a few general solutions that help can companies operate better:
Separate out internal and external issues and build different solutions
When we think of the problems a company could face, we often think about the big issues of the day. How might a change to trade policy affect our ability to operate? What would a new industry regulation mean for our processes? These issues are undoubtedly important to consider, but there are numerous internal factors that are just as key. For example, how quickly could you respond to one of your fleet trucks breaking down, a demand surge or even special customer request? These factors will determine a business’ long-term success so it is worth considering the right approach.
For internal issues, it is a good idea to have access to some spare resource, or at least not to operate at capacity all the time. This isn’t to say you should have unused vans or workers sitting idle, but use resources well and ensure that if you did need to redirect workers or stock, you still have enough in the right places to operate as normal.
Reduce visibility blind spots
Regardless of whether preparing for internal or external issues, reducing the number of inventory blind spots in a supply chain can help improve overall flexibility. In any busy field service operation, there is always a proportion of parts out in the field. For many businesses, they have no visibility over this stock which means it is essentially untouchable during any time of difficulty.
This can drastically limit the number of options available when you need them. Imagine if you received a large order and needed to reroute all lines of a specific stock in order to fulfil it. Without visibility of field stock, this is essentially impossible. You can order more, but as stated above, being flexible is about meeting customer needs cost effectively. Ordering extra stock when you have some idle in the field is not a cost effective option.
Investing in technology that can track stock out in the field will eliminate these blind spots and put you a better position to react quickly to issues.
Make your fail-safes automatically top up
Large supply chains have often looked to keep minimum quantities of fast moving stock at various locations around the country as a fail-safe. This is an intelligent approach to stock management. Demand can be unpredictable and it is not always possible to plan correctly for sudden spikes, so always holding some stock offers greater flexibility.
Fail-safes are very useful, but only if they are followed. Often stock holding is a manual process and a person is responsible for checking minimum levels around the network. This person is not infallible and can make mistakes, but these mistakes aren’t usually picked up until the fail-safe stock is needed. The preparation that went into making your supply chain flexible is wasted.
Modern warehouse management systems can be set to automatically manage fail-safes and raise a pick order as soon as stock falls below a certain level. This can quickly become a worthwhile investment and it is a simple alteration that doesn’t require you to change your processes.
The economic climate continues to be unpredictable and with upcoming upheavals like Brexit, this doesn’t seem likely to change anytime soon. Whether it is reacting to new regulation or taking advantage of increased demand, it is worth investing in flexibility to make sure you are equipped for the challenges of the future.