The supply chain is nothing short of a marvel. It works behind the scenes to bring us the countless items we rely on every day, all of which are crafted and delivered through a fascinating process journey. From the moment a product is created to the instant it arrives at our doorstep, the intricate web of the supply chain ensures we have everything we need.
Do you doubt it? The e-commerce platforms we use, the packaged food essentials we use daily, the vehicles we use, and even the clothes we wear today reach us after a complex supply chain process. Now, you can connect the supply chain with your life, but why do we need agility in the supply process?
When you walk into a store, you can find cupboards filled with various goods. If the supply chain lacks agility, stores will either be half-filled or exceed capacity. Similarly, if there is no agility in the process, you will get your order from the e-commerce website after a long time without a proper tracking facility. UAE industries are seeking supply chain agility to prevent such situations in the country's manufacturing, e-commerce, pharmaceutical, automotive, food, and logistics sectors. SAFe can be a key to mastering the required agility. Let me explain in detail how it will be handy.
What is Supply Chain?
A supply chain comprises several processes that link the flow of raw materials to the production of components, ultimately resulting in the creation of finished goods. Taking any material from its starting point to the hands of the end consumer is a complete supply chain process. This process involves multiple activities, including sourcing, producing, and delivering products throughout the entire cycle.
A supply chain is used to manage the flow of goods or services. In the UAE, various industries exist, including oil and gas, e-commerce, logistics, and healthcare. These industries are the heart of driving the country's economy. Enhancing the agility of the supply chain will significantly impact the country’s growth, as the government also stated during the G20 meeting.
What is SAFe?
The Scaled Agile Framework (SAFe) is an expansion of SAFe. Agile can easily fit small organisations, but larger organizations face specific obstacles. To overcome these challenges, SAFe was introduced. Its scaled nature helps fit and help any size organization succeed.
SAFe is not limited to any specific industry; it can be applied across various industries. Many IT industries and manufacturing companies have adopted SAFe for their production processes. SAFe can also be used by any organization to improve supply chain agility.
Role of SAFe in Increasing Supply Chain Agility
If you need to know how SAFe increases supply chain agility, then here are some significant reasons:
1. Develop the Lean-Agile Mindset
Maintaining a lean and agile mindset is crucial for improving supply chain agility. This approach implies the importance of continuous learning, collaboration, and iterative approaches.
Continuous learning can help in staying current with the latest trends. Collaboration will help you improve process speed and productivity. The iterative approach will help you adopt unexpected changes.
2. Aligning and Coordinating Teams
The supply chain encompasses multiple departments, including sourcing, manufacturing, logistics, inventory management, demand planning, and customer relationship management teams. It is vital to align every team with the organization's single goal.
Handling or coordinating multiple teams is not a simple task. SAFe provides a framework for coordinating agile teams, enabling everyone involved to work together effectively.
3. Accelerating the Process
The SAFe helps identify the processes and workflows involved throughout the supply chain. The framework also helps optimize workflows and streamline processes, reducing the time involved. This time reduction can be a significant factor in enhancing the supply chain's agility.
4. Empowering Employees
Every employee involved in the supply chain has a role in streamlining the process. The SAFe helps empower employees, enabling them to make crucial decisions based on their domain expertise. It also provides employees with the required tools and knowledge to improve the supply chain process.
5. Improving Continuous Learning and Improvement
SAFe believes in a culture of continuous learning and improvement. Organizations that match market requirements can learn the process and sustain themselves.
These central roles help increase agility in the supply chain.
Importance of Supply Chain Agility in the UAE
Why does the supply chain need to increase agility? What is the importance of supply chain agility in the UAE?
1. Improving Trade and Disruptions
The UAE is one of the major hubs for global trade, and disruptions or changes in the supply chain can significantly impact the country's economy. The changing environmental and social conditions worldwide can also affect the supply chain. Following SAFe will help implement Agile supply chains in any business. The adoption also helps change suppliers, adjust production plans, and find alternative logistics routes, reducing the impact of disruptions.
2. Staying Relevant to Market Trends
With the increase in e-commerce, home delivery and porting goods techniques have emerged as key components of the supply chain. UAE's consumer base is diverse and constantly growing. Consumers also expect faster delivery, personalized service, and a higher level of service satisfaction. SAFe can guide the organization to adapt to changing demands instantaneously. These actions will be done by making adaptive inventories, improving logistics capacity, and providing personalized service solutions.
3. Enhance Customer Satisfaction
Customers are a significant part of supply chains, so maintaining their satisfaction levels is essential. SAFe will help improve customer satisfaction by delivering products on time, providing exceptional customer service, and minimising supply chain delays. These features help enhance customer satisfaction with the organization.
4. Reduced Costs
SAFe helps maintain inventory and avoid unnecessary costs in the supply chain. Streamlining logistics will reduce unnecessary fuel consumption and prevent repeated deliveries of products. Waste from the supply chain process can be reduced, and agile supply chains can help businesses reduce overall operational costs.
5. Competitive Advantage
The agility of the supply chain will enable businesses to stay competitive in today's increasingly competitive market. These abilities include responding quickly to conditions and meeting customer demands. Agile supply chains allow businesses to gain a competitive edge by offering faster delivery times, more personalised products, and superior customer service.
Supply Chain Agility Strategies
Specific strategies can help improve supply chain agility and help organizations survive unexpected changes in supply, demand, and the market.
1. Demand Forecasting
Supply can be valuable if it meets demand; if it is less than the demand or exceeds the demand, it is useless. Organisations can forecast demand through predictive analysis, advanced tech support like AI, and advanced data collection.
Demand planning can be based on historical data of the inventory. With the forecast, the supply chain can be more agile.
2. Synchronized Production
The supply chain can work based on the production of the organizations. To improve output without blogs, plan inventory needs, and reduce waste, primarily to fulfil the production target.
3. SKU Reorder Points
The Stock Keeping Unit (SKU) maintains a fixed inventory level to prevent out-of-stock or excess stock situations. Calculating SKU reorder points ensures that organizations have the required stocks.
There is a formula to calculate the SKU reorder point.
SKU reorder point = (average daily sales x lead time in days) + safety stock
4. Real-time Data
The logistics or product passes through multiple layers, and unless real-time data is communicated, the supply chain can’t remain accurate. The members involved, like suppliers and partners in manufacturing, logistics, and distribution, should be connected and provide real-time data. This process will increase the supply chain's agility.
For example, in a production company, if their inventory doesn’t share real-time data, it may cause overstocking or a shortage. If the suppliers don't update the real-time data, orders can’t be placed and supplied. If the logistics team doesn’t provide real-time data, finding the live location and status will be hectic. This shows the power of real-time data; even software is used to stay connected and updated.
5. Automation in Warehouse
The primary activities of the Warehouse include managing inventory, maintaining order details, placing and moving materials, receiving supplies, quality control, and returning goods. These activities can be automated to increase the efficiency of warehouse handling and improve supply chain agility.
Robotics can be utilised to automate the processes of receiving, placing, and moving supplies. Software can be used to automate maintaining order details and managing inventory details. These automations can significantly increase supply chain agility.
Challenges in Applying SAFe to Supply Chain
While SAFe has many pros for supply chain agility, there are some challenges to implementing it within organisations.
1. Top-Down Decision Making
Decisions must be flexible and dynamic to achieve better outcomes; however, SAFe often employs top-down approaches that hinder this flexibility. Generally, top-down decisions are difficult to implement and can conflict with team members' collaboration.
2. Integration Challenges
Using SAFe in a large organization to enhance supply chain agility has some integration challenges. Stakeholders can have specific requirements that require more effort and can disturb the existing workflows.
3. Cross-Functional Alignment
Multiple cross-functional teams are involved in managing the supply chain. These teams require enhanced collaboration between every team member, making it difficult to align the goal with every team.
4. Measuring Success
Defining KPI metrics to measure the success of a SAFe implementation can be difficult in this process. The outcome can be based on lead times, inventory levels, and customer satisfaction.
What does SAFe hold for the Future of the UAE’s Supply Chain Sector?
The UAE government is planning to encourage a greener supply chain.
They are promoting green vehicles for logistics and energy-efficient warehouses to reduce power consumption. The government plans to utilise AI to enhance supply chain agility. Autonomous cars, drones, and self-driving trucks are currently in the development phase, and they may soon revolutionise the supply chain industry.
Conclusion
The Supply chain of major supplies throughout the UAE can increase the country's economy. The government is also supporting the agility of the supply chain. Organisations must adopt SAFe to enhance agility and achieve the expected quality and quantity of output.
The Scaled Agile Framework will help implement the critical factors that can improve agility. The strategies that can help streamline the processes involved and help the organization enhance its supply chain agility. You can learn it in detail at the SAFe certification process, which provides knowledge of all the essential methods, roles, and strategies required. By knowing them, improving the supply chain agility will be easier.
