Business agility: the route to new revenue

Posted on 3 Mar 2017 by The Manufacturer

Organisations of all sizes can respond to changes in the market and adapt in line with them, if they have an agile approach to their business, as Autodesk’s Diego Tamburini explains.

Generally speaking, business agility refers to the ability to rapidly respond to change. The ability to bounce back from disruptions, get innovation to market faster, develop or acquire IP quickly, embrace new technologies, and adapt to changes in the business, economic, or social environment.

Diego Tamburini, manufacturing industry strategist, Autodesk.
Diego Tamburini, manufacturing industry strategist, Autodesk.

As we all know, the manufacturing industry is part of an increasingly volatile and uncertain environment, where change – more precisely, rapid and frequent change – must be expected.

Change in manufacturing comes from multiple sources: changes in customer demand; technological breakthroughs; supply chain disruptions (due to weather or geo-political events); equipment breakdowns; currency fluctuations; raw material shortages, and changes in governments and regulations.

All of these have the potential to make or break an organisation, based on their ability to pivot when required. What’s essential is that this business agility is built in across any organisation and is bought into by the breadth of the team. It can be easy to fall into patterns of behaviour in which ‘we’ve always done it this way’ can cloud the optimum approach for now.

Essential to securing this buy-in is having business agility elevated to a strategic level. As agility will increasingly be a requirement for manufacturers to be competitive, senior leaders must recognise the value in putting in place processes to enable them to evaluate the opportunities in the market and flex to meet them, where possible.

For some, that will mean letting go of the models of the past where economies of scale, large manufacturing operations, long product cycles, and mass production were the rule. In the current environment, nimble beats strong.

Manufacturers can increase their agility in four main areas; through product agility, manufacturing agility, financial agility and collaboration agility. Let’s take a look at each in turn.

1. Product Agility:

This form of agility focuses on the things we can do in the design itself of the product that allow manufacturers to quickly and economically adapt to meet changes in demand, fragmentation of the consumer population, and disruptions in the market and supply chain. The idea here is to make the product flexible by design.

Some approaches to increase this flexibility include modularisation, platforming, standardisation, late differentiation in the designs, software-based configuration, and design for 3D printing. What is key is having the agility to customise or reconfigure a product, minimising the impact to production or the supply chain. A classic example here is the Volkswagen MQB platform, which gives Volkswagen the flexibility to support a range of models through one platform and shift production between factories as required.

2. Manufacturing Agility:

Organisations also have an opportunity to review their manufacturing processes in order to deliver more agility to the business. Favouring more flexible product development technologies (such as digital prototyping, digital manufacturing, and cloud), and building more flexible factories and supply chains that are inherently more resilient and can recover more quickly from disruptions will be crucial for organisations to consider.

3. Financial Agility:

It’s essential that, particularly in these times of uncertainty, organisations have a clear view of their financial position and how this could change, based on a range of factors. Organisations need to ensure that they understand the potential shifts in the market to enable them to mitigate fluctuations of supply costs (such as energy, commodity prices, etc.) by fine-tuning pricing, hedging in the financial markets, shaping demand generation, and adapting suppliers’ contracting as needed.

4. Collaboration Agility:

It’s no longer the case that organisations can focus solely on the separate teams working within them. In order to thrive and even survive in the current market, it’s essential that organisations look to drive collaboration across all the players in the product life cycle (members of the design team, production team, customers, suppliers, communities) and across time zones and geographies.

Only by creating this collaborative culture will organisations spot changes in the market early and have the internal teams and supply chain relationships in place to quickly shift when needed. Introducing new methods to drive agility, such as Scrum, can also help to foster innovation in a collaborative way.

Across these opportunities, there are common factors. For organisations to succeed, they must review all of their relationships, processes and outputs regularly, to ensure that they have the business agility to pivot based on market demands.