What is operational flexibility?

by | Oct 21, 2024 | 3PLs, Data Management, Inventory Management, Order Management

Across industries, adaptability is essential in today’s market, and the ability to adjust to new disruptions separates highly successful businesses from their less-successful competitors. The drive to improve the elasticity of complex, highly regulated operations has created an emerging practice called operational flexibility.

Understanding operational flexibility

Operational flexibility refers to the capacity of a business to make functional adjustments based on changes in the market, fluctuations in demand or other disruptions. The supply chain is full of variability and uncertainty, and businesses that can flow through disruptions instead of halting their process will have a marked advantage.

Still, there are a number of challenges that stand in the way of reaching peak operational flexibility, and seeing how your business can identify and move past them will help you achieve a new level of efficiency across your organization.

Moving past legacy tech

One of the largest roadblocks to improved operational flexibility is the reliance on older systems to keep up with modern challenges. With rigid solutions that might be confined to your premises or too old and expensive to maintain, it can be difficult to build in more flexibility, more visibility or more simplicity as you need it. Your business may be experiencing:

  • Hindered adaptability from slow systems.
  • Lack of real-time data that limits responses.
  • Resistance to new tech due to implementation concerns.

Considering a cloud-based system that can make use of AI- and ML-based tools and pairing it with IoT-enhanced sensors will help your business break out of the rigidity imposed by legacy systems and move toward greater flexibility.

Managing partner disruptions

While outdated solutions represent a large hurdle for operational flexibility, the way your business works with partners could be hindering your growth. As commerce expands beyond borders, the global supply chain becomes more complex by the day—making them exponentially more difficult to manage. Global partners might have slowdowns and bottlenecks that can’t be predicted from your vantage point, and those longer lead times can jeopardize your flexibility, ability to fulfill orders and forecasting for next season. You might see the following:

  • Hindered efficiency from slow production cycles.
  • Bottlenecks created from relying on a limited number of suppliers.
  • Slowdowns due to global distance from suppliers.

Rethinking your supply network to multi-source products, improving visibility with solutions like digital twins and blockchain and utilizing practices like lean manufacturing or just-in-time production can help you tighten lead times and remain flexible during partner disruptions.

Handling the human angle

Dated technology and logistical partner challenges are often top of mind when it comes to operational flexibility, but the people that make up your workforce comprise another potential challenge as you move toward improved agility. Employees with limited skills can make your processes feel rigid and stiff, and longstanding company culture can create resistance to change. The common problems are:

  • Slow response times stemming from siloed skills.
  • Limited agility rooted in company culture.
  • Inaccurate forecasting from misaligned stakeholders.

Prioritizing cross-training employees while promoting a culture of continuous improvement can take your business out of the cycle of reactive operations and toward a m ls. ore flexible approach. Supporting that approach with Sales & Operations Planning can also help align leaders on goals, initiatives and challenges as the business moves forward.

SPS can help you achieve operational flexibility

Thinking more about improving the agility and market position of your business? Take a look at what SPS has to offer and see how we help companies across the supply chain stay in sync.

Tracey Ortiz
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Operational Flexibility

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