How agile structures can assist in positively affecting demand variations

Of course, most of us has experienced the chaos and panic caused by an erratic order book, and all things associated with it, such as maintaining your hard earned consistent high standards and good reputation to continue to be the supplier of choice.

However, by its nature some product lines become unpredictable in terms of delivery timings, operational management, manufacturing and procurement wizardry which in turn causes logistical challenges.

At some point or other most businesses have experienced the difficulty in obtaining additional staff at very short notice. If you do satisfy your immediate need, the likelihood of being able to ‘deliver’ your needs quickly are at best, challenging due to what’s involved in ‘making it happen’ to become a satisfactory reality.

If we consider the usual methods of long-term resolution, such as automation, sub-contract or modifying your offer to accommodate alternative components or country of origin for example. Sounds simple if you’ve got a period of time put aside to make this kind of change a reality, but these solutions are time consuming and will require much effort and know-how by the ‘Management team’ to set up to become an ongoing workable solution.

Times have changed and so have operational needs due to a new style of contracts, including environmental obligations and additional measurement criteria. Therefore, this traditional approach as a ‘standalone solution’ doesn’t work as it once did, as it often creates a further set of complications as we are all very conscious of making a real difference to our environmental responsibilities. All these considerations along with pressure on available capital within the business, put pressure on business in the longer term, but doing nothing is not an option, so gaining confidence is essential and can only be achieved by careful consideration of all aspects long and short term.

Indeed, many larger organisations are in supply chains where the client relationships are demanding even further detail under the auspices of binding ESG policies. (Particularly in relation to scope 3 declarations).

Therefore, there are compelling reasons to approach the problem differently.

Helping to refresh your thinking on Operational Demand Variation

Achieving Agility

The important point is to remain ‘agile’ as a business. To do this effectively it must be achievable and meet expectation – but that doesn’t happen without planning / commitment and agreement in place between your business, your suppliers and the customer.

Customers need to have a ‘partnership’ approach to your business and an understanding of the commitments involved.

Customer ‘Demand’ can be expressed in a variety of ways.

• Increased volumes that require either shorter lead times
• Changed Specification

Every business is unique, and each solution needs to be carefully tailored to achieve the required output/outcome. Your business may need to renegotiate or change suppliers to suit the order / deadline etc. but don’t miss this also takes time and management to keep focused and tested to ensure quality is not lost on the overall product / service whilst remaining profitable

Enhanced supplier / customer relationships

To maximise effectivity within your organisation, regular business reviews are essential. It takes clarity of thought and clear understanding of all aspects to know when your business is ready (to take a new or amended order). Just to say to a customer, we cannot respond in the time frame - might just make you become the switched-out supplier!

Considerations for success

• Align your supply partners with care. The changes in ‘demand’ can be best overcome by utilising and developing your supply partners ability to respond to both the usual but potentially additional or updated items. Key point - is to build a relationship based on flexibility and trust.
  • This may risk an increase in the base price; however, this has great potential to increase opportunity and value-add to your client.
• Review your entire process to allow identification of the operational ‘buy’ keeping the valuable skills in house and reviewing routing for ‘low skill’ elements that do not best utilise your teams learned skills. These elements can then be added to your supply specification needs.
• Review operational investment as part of thestaged process to protect your business for future growth. This can be considered for degrees or totality of automation. Automation requires different process design and therefore must offer real benefit to both the client offer and internal profitability. This does take time but is part of a defined strategy to both grow and protect the organisation.
• Open dialogue with your total team to explain both Opportunities and Risks of any considered change. We would always suggest that ideas multi-level through the organisation and the unusual must be carefully considered with all responsible.
• Develop management information systems that answer a variety of questions. Delegate responsibility carefully but structure away from a vertical system into more horizontal approaches. This flattens the structure, shortens decision time but also increases risk if structural controls are not collectively designed and reviewed.
  • Quality systems must measure agreed key elements not just a technical style specification.
  • Ensure your HR contracts are amended carefully. Key is ‘buy in’ rather than enforced change.
• Consider a different reward system for your team. Traditionally incentive payments or additional annual awards have rewarded selected roles. As agility relies on all, ensure financial enhancements are objectively considered.

The appreciation of total scope and size of changed demand may not be totally realised until a working partnership is developed on both sides of the supply chain. Opportunity has to be developed strategically to avoid negative consequences and be fully supported by the senior leadership team.

All of this takes skill and expertise to design and implement throughout each individual organisation, based on specific needs and outcomes.

So how do we help?

We help you to identify your options and create a way forward. We are specialists and have a track record of delivery.

We help to change perceptions by assisting with improved working methods. We work to ‘align functions’ and increase your business ability and profitability.

Most of all we are Independent Growth Consultants, on your side!

We work directly with businesses, hands-on or as a senior advisor. We are your independent partner. Starting effectively, ensures you are in control and are poised to make the best of whatever comes your way - adverse or positive.

Contact us for a no obligation chat or to find out more give us a call