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What is an Agile Supply Chain? - Definition & Example

What is an Agile Supply Chain? - Definition & Example
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  • 0:00 Agility in Business
  • 0:50 An Agile Supply Chain
  • 1:45 Agility in Action
  • 3:26 Lesson Summary
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Lesson Transcript
Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

How can agility give you a competitive advantage? Clothing retailer Zara might have some ideas. In this lesson, you'll learn more about the agile supply chain and look at Zara as a leader in the model.

Agility in Business

Turn on the television any given Saturday or Sunday during the fall, and you'll see professional and collegiate football players going head to head on the gridiron. The few athletes who make a successful career out of playing the sport professionally exhibit several important characteristics. Among them is the idea of agility, or maintaining and controlling their bodies while moving quickly and nimbly in order to bust through the line and best their competition.

Agility in business is a similar concept. It means that companies have the ability to respond quickly, adapt to their environment, and maintain momentum while doing so. One area where agility is particularly important is in the supply chain, or the way products are produced and delivered. In fact, the concept is so important it has coined its own phrase: the agile supply chain.

An Agile Supply Chain?

You already know from the opening of the lesson that agility refers to speed and efficiency. An agile supply chain is focused on speed, cost efficiency, responsiveness, flexibility, and productivity in the production and delivery of goods.

Those are all good characteristics, right? Combined, they define what an agile supply chain is: a system of product distribution that is concerned with doing things quickly, saving costs, being responsive to the market and consumer demands, maintaining flexibility, and keeping productivity at all-time highs.

Agile supply chains rely on real-time data to help make decisions in day-to-day operations, as well as projected data in supply forecasts. Combined, it creates a more robust process that saves businesses and consumers money, eliminates waste of excess inventory, foresees potential shortages, and does it all quickly and productively. With agile supply chain, flexibility is key.

Agility in Action

One business that gets agile supply chain right is clothing and accessory retailer Zara. Founded in 1975 in Spain, the company is under the umbrella of Inditex, the world's largest apparel retailer. In mid-2017, the Zara brand was valued at more than $11 billion. A brand with that kind of power must be doing something right. You might say that the secret to Zara's success is really no secret at all: it's all in its agile supply chain.

Zara's strategy starts with its runway copycat designs, which it designs and sends to its stores all around the world within as little as 21 days. Once products are on store shelves, the attention turns to sales associates and store managers who interact with customers to gauge interest and ideas about everything from their design preferences to how they'd make existing products better.

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