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Agility: Is It More Than A Buzz-Word?

September 14, 2011

Agility is about the ability to adjust to fast-moving market conditions. These might be the result of economic conditions, new competition, unexpected geo-political events …

As always, a company’s ability to survive depends on its ability to adapt. So to the extent that there are pressures for adapting further and faster  than in the past, ‘agility’ has become an important concept and characteristic. Being more agile than competition is one factor that contributes to competitive advantage.

Recemtly I was discussing this topic with Professor Rob Handfield of NCSU Supply Chain Management College. We agreed it is a subject we will work on together. Our conversation focused on some of the current constraints upon more agile, more adaptive behavior.

The global networked economy has expanded markets and supply options. It has driven commoditization (in the search for price competitiveness); it has driven compliance (in the urge to simplify, cut costs and drive consistency); and it has driven category management (as a way to address the complexity of global choice).

But ironically, these three actions have in many ways constrained the ability of the business to adjust to changing market conditions. They have often undermined supplier loyalty; they have focused on low cost, often at the expense of long-term relationships; and they have caused a transactional focus that prevents leverage in supply management and the development of ‘collaboration’, internal or external.

On the sell-side, there is a tendency to take a more relational view, but it too is driven by large bonuses for getting the contract signed – not for its successful execution. Therefore Sales often behaves in a way that causes mistrust in Procurement – and among their internal colleagues.

We came up with a few questions on which we will be seeking opinions. Among them are:

What does agility mean to you, in your business or the businesses with which you work?

Does it fundamentally differ between buy-side and sell-side operations?

What actions are you taking to enable agility in your business operations? What areas are you prioritising?

Do you think the need for agility affects old risk management regimes – and they will steadily decline or be repaced by more dynamic approaches?

We would love to have your input and ideas – either through comments, emails, or arranging a call.

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