What is a Responsive Supply Chain and How to Create One

What is a responsive supply chain?    

A responsive supply chain has the agility to speedily adapt to changes in demand, market conditions, or other factors that may impact the supply chain. 

Responsive supply chains can use new routes, and scale up or down in response to customer and market demand.

Why is it important to have a responsive supply chain?

-    Adapt to market changes: It’s important for organizations to be responsive to demand fluctuations. These can result from seasonality, such as a high demand for giftable items at Christmas, or trends that see spikes in demand. Additionally, new product introductions can put pressure on supply chains to quickly roll out new products to capitalize on demand.
-    Risk management and aversion: A responsive supply chain can be beneficial to mitigate risks, such as rerouting, switching suppliers or adjusting production scales in the face of unforeseen events like natural disasters or geopolitical instances. 
-    Meet customer expectations: It’s easier to satisfy customers with fast delivery times with a responsive supply chain. The ability to adjust elements of your supply chain also allows you to offer customized products to customers. 
-    Competitive advantage: By providing speedy delivery of high-quality products, you can satisfy customers and maintain their loyalty, which can help maintain market share. Responsive supply chains also have the market responsiveness to react to the environment and gain a competitive edge over other organizations. 
-    Compliance and adherence: A responsive supply chain can easily adapt to any changes to regulations, helping to ensure compliance and avoid penalties.  

What’s the difference between an efficient and responsive supply chain?

An efficient supply chain is about consistency and cost efficiency, whereas a responsive supply chain is one that has the agility to adapt and provide continuity in the face of change.

Think of it as you have an efficient supply chain for reliability and a responsive supply chain for chaos!

Ideally, you should be able to strike a balance between having both an efficient and responsive supply chain, but depending on the nature of the goods you are dealing with, you may lean more towards one than the other. 

How can I build a responsive supply chain?

One of the most important ways to enable a responsive supply chain is with technical integration that incorporates technology to help you be as agile as possible.

You can leverage data and analytics to proactively adjust your supply chain. If you collect and store data, you can use it for predictive analytics to forecast demand accurately. Both looking at historical and real-time data can support your decision-making. Additionally, automating processes helps to ensure that they are accurately executed and if you need to amend at any point, you can adjust the process model and see the results reflected in the process. 

You should also consider investing in intelligent technologies, such as artificial intelligence, the Internet of Things that can add additional insights to your operations and further improve efficiencies to give you a competitive edge. 

Other ways you can build a responsive supply chain are through:
-    Agile forecasting and planning: Use data and trends for rolling forecasts and have scenarios and contingency plans in place for potential impactful scenarios so you know how to respond. 
-    Fostering collaborative relationships: Both internal and external relationships should help you to be responsive. Internally, your different departments should be aligned to enable quick decision making, while externally if you have strong relationships with your suppliers, you can quickly adjust to market conditions.
-    Smart and flexible manufacturing: Also known as Industry 4.0, smart factories enhance the resilience of supply chains by allowing for rapid adaptation to disruptions as it is easier to adjust production processes.
-    Inventory management: Maintain good levels of safety stock to act as a buffer just in case you are unable to obtain raw materials or have an issue with manufacturing and cannot produce products. 

Create a responsive supply chain with a low-code platform

Build a responsive supply chain to prepare for any potential disruptions with a low-code automation platform. This helps you take a flexible approach to your business processes, offering agility in the face of disruption. And the platform offers a collaborative, informed approach to working, helping to foresee certain disruptions, respond to any issues and communicate with stakeholders to negate knock-on effects.

Find out more about Bizagi’s supply chain solution and how it could support your business.