If the latest hype is to be believed, a bimodal supply chain strategy will be the only way (for larger companies especially) to secure supply chain success in the future. Whether that is true or not remains to be seen.

What it is apparent is that entrenchment in the conventional principles of linear supply chains just won’t do anymore. The supply chain environment has too many new challenges, driven by dramatic changes set in place by globalism, digital commerce, and increased consumer/buyer empowerment.

So just in case, the bimodal concept proves worthy of the hype, it will at least pay to understand what it’s all about. The objective of this post therefore, is to clarify the meaning (in a nutshell) behind what may become the supply chain buzzword of 2017.

A Brief Explanation of the Bimodal Supply Chain

The bimodal supply chain concept has nothing to do with shipping by air, sea, road or rail, although you could certainly be forgiven for thinking so—until you know better. In fact, bimodal supply chain strategy involves the simultaneous, side-by-side management of two distinct modes of operation, appropriately known as Mode 1 and Mode 2:

Mode 1: This is your traditional supply chain operation, based on efficiency, value-addition, and waste reduction, and eminently suited to what we now know as the old world of predictable demand. Let’s face it, even demand fluctuations used to be predictable compared to the current environment of volatility.

Mode 2: This is perceived as the new supply chain prerogative—a need to be flexible, agile, to take big, bold risks and experiment to find ways of adapting to rapid shifts in market forces (think natural disaster, economic upheaval, and political issues).

Two Into One Must Go

If it helps, you can think of the two modes in a bimodal supply chain as being analog (Mode 1) and digital (Mode 2), but really the difference is more than merely technological. It’s also about the way your company promotes supply chain thinking, and as such, needs operational management teams comprised of both convergent and divergent thinkers.

Another way to visualise the concept is to consider Mode 1 as being traditional, while Mode 2 is exploratory.

If this sounds like a surefire way to promote, rather than discourage the silo mentality that so often pervades supply chain organisations, there’s one more key piece of information you need to complete the bimodal supply chain puzzle.

With Mode 2 being heavily focused on experimentation and innovation, success will take the form of new ideas taking hold and being operationalised under Mode 2. Once proven, these innovations should be scaled up and introduced into the Mode 1 operation.

The idea is that over time, practices, processes, and concepts developed and tested in Mode 2, are blended with more traditional approaches to create a supply chain that is reliable and stable, but at the same time resilient to volatility and flexible enough to survive today’s fast pace of change.

Bimodal Supply Chain Implications

Adoption of a bimodal supply chain strategy of course requires careful consideration in terms of its implementation. Thought must be given to how the two modes are enabled.

For example, you might need to segment customers and products into two groups, leveraging the Mode 2 approach to pursue superior service, agility and responsiveness to the most demanding (tier 1) group, possibly accepting a higher cost-to-serve in order to do so.

Meanwhile, your tier 2 customers are served using the Mode 1 strategy, perhaps enjoying a lower unit cost than the other group. Another possibility might be to use Mode 2 when introducing new products or pushing into new regional markets, leaving Mode 1 operations for products and regions with an established market profile.

So What Do You Think About Becoming Bimodal?

Whether bimodal supply chain strategy makes sense to you or not, you’re going to be hearing plenty about it over the course of 2017 and perhaps—if evidence grows in favour of its implementation—well into the remainder of this decade.

If this post has helped you to grasp what it’s all about, or if you already had a good idea, what do you think about bimodal strategy?

Is a bimodal approach the only way to deal with a changing supply chain world, or is it more likely to foster divided loyalties and rivalry between those responsible for each mode? We’d love hear your views, so why not let them be known by sending in a comment or two to this post?

Best Regards,
Rob O’Byrne
Email: robyrne@logisticsbureau.com
Phone: +61 417 417 307