Agile Supply Chain Accelerate Innovation

Agile Supply Chain: Adjusting How We Work to Accelerate Innovation

Agile product development is a well-trodden methodology the most innovative companies utilize to convert ideas into exciting new products. The discipline has largely settled into a mantra followed by early design and engineering teams, yet is ignored by supporting functions tasked with product commercialization. Today, Agile isn’t simply a tool for creatives, it’s a methodology that supply chain can embrace to accelerate new product innovation.

Supply chain leaders who deploy Agile stand to better align their teams’ efforts with their organizations to create more value in less time. Further, the traditional functional misalignment and friction that germinates around new product launches tends to be lessened. Most importantly, the workload balancing and task adjusting that Agile affords enables happier more productive teams.

Methodologies can be overly grandiose-complex terminologies that require management consultants to decipher and deploy, which simply isn’t the case with Agile. Concepts like Agile are simply modern-day information workers’ hammers to do a job. If building more agility into your team’s day-to-day work and your organization is of interest, than Agile Supply Chain Management could be the right tool for you.

A Mindset, Not a Destination

Author of Agile Project Management: Creating Innovative Products, Jim Highsmith, said, “agility is principally about mindset, not practices.” As with continuous improvement, Lean, Six Sigma, etc., these methodologies aren’t about a finite end goal, but rather a never-ending pursuit. Agile creates more organizational flow by aligning supply chain operations and all the sub-functions of purchasing, logistics, supplier quality and production control with the flexible creativity underway in design and engineering.

A wholehearted, organizational embrace of continuous product interactions, refinements and changes is required for today’s technology products. This mindset shift requires supply chain to move from the legacy, waterfall-based, rigid stepped processes to Agile-based, quick flexible sprints.

Rethink How to Divvy Up Work

High-volume products with long development and production cycles have shaped the way we organize supply chain work. As product lifecycles compress, we need to rethink how we organize our day-to-day supply chain work to keep pace.

Procurement teams are largely organized by part and/or raw material type which enables our teams to build specialized expertise and realize productivity gains. Certainly, these are nice benefits, but in a world of rapid change we need to convert from specialty supply chain sub-functions – e.g., purchasing modules – to tasks – e.g., sending request for quote (RFQ) packages. The harsh reality is that prior specialization planned productivity gains result in a wide range of team member utilization. Breaking down supply chain work into tasks can exponentially improve supply chain team output through better workload balancing.

Embrace Software to Smooth Transition

Agile project management software is the core tool required to enable the change from traditional supply chain management to Agile. The deployment of these tools is easy in comparison to eSourcing and Enterprise Resource Planning (ERP) software; most systems can be up and running within one week. Depending on the experience and size of your team you may want to engage a third-party services firm to facilitate a kickoff workshop and ongoing support training to ease the transition. Another set of eyes can save a lot of time and provide additional resource capacity for your team to help navigate the conversion.

You’ll also want to look for software that allows you to divide up tasks by project, level of importance and status (at a minimum). Agile Supply Chain is a more granular approach to dividing work into tasks versus providing process statuses. To unlock more productivity gains, look for advanced cloud software that allows teams to create and assign tasks real time via collaborative communication tools like Microsoft Teams.

Scoring & Assigning Tasks

Practically speaking, tasks are a better way to distribute work among teams to successfully accomplish the supply chain mission that’s required to commercialize a new product. Agile will necessitate some new skill sets of leaders, mainly scoring and assigning tasks. Usually a simple 1-5 scoring scale, 1 being the least difficult and 5 being the most difficult, works well. Avoid spending too much time trying to get early task scoring perfect. The beautiful thing about Agile Supply Chain is that you and your team can dial in scoring over time.

Once you’ve scored tasks, the leader assigns tasks to each supply chain team member. Typically, tasks are assigned over a two-week period called a sprint, and these tasks could range from completing onsite supplier audits to identifying potential suppliers for air fright. The more specific you can make tasks, the better.

Agility Will Give You an Edge

Cost is our historical bellwether metric for best in class. Lately speed, specifically accelerating the pace at which we launch all-new products, has been discussed as a newer data point for which we’re measured. Cost and time are significant and we must get those right to succeed; however, it’s agility that’ll provide you, your team and your company with a long-term, more defensible edge to consistently deliver products that best align with customers’ needs.

People talent is the core currency in which we all complete on. The ability of supply chain teams to rapidly adjust in the face of changing economics, markets and technologies will be the key to driving future innovations forward. Agile Supply Chain stands to cultivate a rare, powerful culture combination of both innovation and execution excellence. Start fostering a valuable edge for your company today by implementing Agile Supply Chain Management.

-William