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to, or in anticipation of, external events or a change in consumer buying patterns.” Referring to the automotive


sector, Green suggests: “Some OEMs manage their T1 suppliers and rely on them to manage T2 and so on up the chain. Others, VW for example, manage their T2 suppliers directly. However,


Agility 25 But, she says: “First you have to get your own


house in order. You have to be in control, which means everything you plan to do, you do as planned at least 95 per cent of the time.” Baines points out that the actions of your own


true agility


requires all the suppliers, T3, T4 etc to be on the same page. Only in this way can a change in market requirements be accommodated rapidly by the OEM,” he says. “Getting this process in place


creates the potential for the next step in supply chain maturity, the ability to offer ‘mass customisation’.” Green sees the role of a 3PL as a


You can’t be agile unless you are lean.Excessive inventory and over- complex supply networks disguise potential risks and delay the effectiveness of any corrective action. MartinGreen


facilitator for agility – to act as an intermediary, to pull people together


and promote open conversations. “To achieve agility you need all the key players in the supply chain to get together to agree what the business processes are, to arrange the exchange of data and information so that all the people involved work off the same information. By doing that you create visibility and agility within the supply chain,” he says. “It’s critical to have those relationships


in place to adapt and change as necessary.” Mass customisation could be considered as the


ultimate outcome of an agile supply chain – where you as a consumer can specify exactly what you want and it will be delivered to that specification within a timescale that is suitable for you. Dell’s agile supply chain is a high profile example of this. There are also examples in the car industry where the final specification can be heavily customised by the customer. This can only be achieved if all suppliers are part of the agile supply network. Green offers another example. “Unipart Eberspächer Exhaust Systems, makers of the exhaust systems for LandRover,have a very agile process wheremanufacture of the exhaust pipe is not started until the vehicle it is destined forhas started its trip down the production line,” he says. “And that means you are not


making exhaust pipes and putting them into stock in anticipation of a particular vehicle configuration. This is not only extremely lean, it is also ‘agile’, reflecting real customer demand. This ensures no waste or excess inventory.” However, being lean, agile and


cost efficient can be difficult to achieve. Powerful


customers


We are seeing categories being farmoremulti- dimensional and this becomes an administrative impossibility trying to deal with the complexity. Simon Bowes


Supply Chain Standard April 2013


working to demanding just-in-time principles often place pressure on suppliers to perform, with the result that the supplier keeps inventory in the supply chain to deal with variability. “Variability arises from not being


able to forecast demand; lack of reliability in supply; and difficulties associated with order quantity. If you can get these issues under control, then it becomes far easier to be both agile and lean,” says Kirsty Braines, partner at Oliver Wight.


business affect others in the supply chain, and ultimately impact the efficiency of the entire supply chain. “One additional part or product variant may have negligible effect on your business, but the cumulative effect can be widely felt, as added cost and complexity is “bull-whipped” across the supply chain,” she says. “Rather than thinking vertically and working to


your target regardless of whether or not it is at the detriment of others within the business or supply chain, you now have to think horizontally. You have to start thinking less about ‘me’ and more about ‘us’.” According to Baines, the focus should lie on those


things that truly add value to the customer. “You have to specify value fromthe customers” perspective and then align your processes throughout the supply chain and look to improve them as much as possible,” she says. Simon Bowes, vice-president for manufacturing


and transport solutions at JDA, says: “There is still a long way to go for most companies in reducing the bullwhip effect. You need information from as far down the supply chain as possible. You need to be connected to the shelf or driven by point of sale demand, rather than just responding to historical replenishment at a DC level.” Similar to observations from Prof Wilding, Bowes


also identifies a renewed interest in segmentation and the need to respond differently to different types of demand.


You have to start thinking less about “me” andmore about “us”.


“The concept of segmentation isn’t new,” he says.


“It’s about aligning available capacity to maximising market share or profitability. The next stage is to get those segments to automatically tune themselves, because things change – demand changes. And we are putting a lot of effort into technology that allows us to recognise the trends in those different segments and to auto-tune accordingly.” He offers an example: In segments where you


want to grow market share you will need to tune products to create high availability, and points out that you will need to be agile around delivery. However, if you have another segment where you are looking to retain profitability, then you may look at different service levels for that segment and you might have different parameters for safety stock, lead times or where in the supply chain inventory is held. However, Bowes highlights the complexity


segmentation can create. “We are seeing categories being far more multi-dimensional and this becomes an administrative impossibility trying to deal with the complexity. You can end up with a proliferation of segments and they need to be constantly reviewed,” he says. “In the past we’ve seen the use of dummy


warehouse codes, but this just creates complexity. So we are seeing companies trying to link planning to execution, which makes perfect sense,” he says. “But trying to manage with just an ERP system is


where it gets complex. All these levels of dummy control doesn’t work.” Bowes believes that a supply chain layer, designed to support segments, enables you to be agile and efficient.


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