Supply chain and labor issues over the past 18 months have caused an increased focus on agility for businesses.
To some extent there is a trade-off between efficiency and agility. There are "shock absorbers" a business can put in place to be able to handle disruptions - for example, inventory and excess capacity can allow a business to adapt to certain types of rapid change. Prior to the pandemic, businesses were far more focused on efficiencies – how to meet demand with the bare minimum of resources required in order to keep costs as low as possible. Many of the executives I talk to these days are questioning how to adjust that balance between efficiency and agility.
But there are ways to "shift the curve" of the tradeoff so that agility can be achieved while maintaining efficient use of assets. The ability to sense and respond to changes in the dynamic elements of the business enables increased agility. Increasing the capabilities of the business to immediately identify supply chain issues, transient labor shortages, machine downtime or quality problems and immediately replan around them will significantly shift the tradeoff curve to increase agility while maintaining efficiency.