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Operational agility: from supply chain to integrated value chain - EY - Global

Growing Beyond: how high performers are competing for growth
in difficult timesOperational agility: from supply chain
to integrated value chain

Windows of opportunity are opening and closing faster than before.

Our Growing Beyond survey confirmed the findings of our earlier surveys, that speed and flexibility are key to the capability of an organization to respond quickly to market opportunities and threats.

This is a fundamental shift for business, much of which had been marching to the different tune of “global standardization” prior to the crash.

As we have seen from our research, this has presented a huge challenge to both process and management – one that high performers are embracing. Active delegation and empowerment are now far more relevant than control, with the focus on coherence rather than consistency.

So, successful companies are ensuring that their strategic agility is fully underpinned and propelled by their operational agility. Maximum agility is achieved when these two factors come together.

On speed:

Speed of action really matters …
Being able to take an idea to market more quickly than a competitor and to take full advantage of new technologies to get closer to key customers, is vital to future growth in today’s marketplace. Quicker response times help companies to react to client needs faster and hence gain or hold market share, and as well to back off, if necessary.

Speed of action is one of the great attributes of the high performer. Lower performers can see the same opportunities, or can even bring together the right insight with the right authority to take a decision, but it is the speed of action that really matters.

This has been confirmed by the findings from our September 2011 research. When asked how companies were acting to increase their speed to market, empowering local decision-making was the highest response – chosen by 49% of all respondents.

High performers put even greater emphasis on this, as well as the need to empower employees to innovate without active management intervention.

Methods for increasing speed to market

... but it is important to focus on longer-term goals too
Speed is about process, but also seems to be about culture and engagement. We were interested to see whether this focus on speed translated into high performers having a shorter time horizon. On the contrary, we found that, while high performers may stress the need for speed of response, they actually have longer-term goals.

On flexibility:

Organize around the customer
Flexibility is essential if the company is to be able to cope with positive or negative changes in markets and regulations. Companies are focusing on making both their back-office and front-office processes more agile to gain competitive advantage, and this often means challenging traditional organizational structures to fit new business realities.

Customization and variation are crucial
Gaining business flexibility requires a company to establish the right balance between adaptability, agility and stability in their operating model, cost structure and processes. And it’s vital to be able to make these changes without compromising the underlying stability of the company.

For further information on this subject, see Operational agility: from supply chain to integrated value chain

Topics covered include:

  • Achieving strategic agility – planning, budgeting, forecasting and reporting; trend identification; risk management
  • Achieving operational agility – optimizing the supply chain; responding to new customer needs – better and faster than the competition; enhancing sales processes and systems; achieving flexibility in the workforce; the important role of IT; business process outsourcing

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