Today’s fast paced business performance requires constant attention and effort; the process is a never-ending production and movement of goods from production to the customer. In the past, large economies ruled the manufacturing world and everybody knew that mass production and full utilization of plant capacity was the way to make money. This style of manufacturing resulted in inflexible plants that could not be easily reconfigured, and were associated with swollen amounts of raw materials, work-in-process and finished goods inventories.
The term “Leagility” was introduced in the supply chain design to avoid or minimize inflexibility and overage in the supply chain by making it lean and agile. This will keep production cost down and allow the supply chain to be flexible enough to keep up with the uncertainties and rapid changes on product demand. The term Leagility is based on two paradigms: “Lean” and “Agility” operations, not only by the combination of the two words, but also by the combination of the two meanings. This combination will be explained later in more detail.
This paper discusses the term Leagility in reference to supply chain design and how the term came to be. It will also provide a detailed definition of what Leagility means and how it’s a critical part of the supply chain, to include how the two paradigms “Lean” and “Agility” work to make a profitable supply chain. This paper will provide facts and opinions from different reports and write-ups from subject matter experts, news reports, and other documents.
The Term Paper on Supply Chain
H2>Introduction We have identified that any initiative aimed at improving the customer/ supplier relationship supports SCM this is true from an internal, individual organization perspective through to complex supply chain structures. Identify at least 1 initiative being implemented (or has been implemented) by your business that supports SCM thinking. For each initiative: Describe the aims ( ...
lean manufacturing prospered in the 1980s and continues to be talked about today. However, in pursuit of greater flexibility, elimination of excess in inventory, shortened lead-times, and advanced levels of quality in both products and customer service, industry analysts have popularized the terms “world-class manufacturing” and “lean production” (Sheridan 1993).
In the 1990s, industry leaders were trying to formulate a new paradigm for successful manufacturing enterprises in the 21st century; even though many manufacturing firms were still struggling to implement lean production concepts. In 1991, a group of more than 150 industry executives participated in a study. Their efforts culminated in a two-volume report titled “21st Century Manufacturing Enterprise Strategy”, which describes how US industrial competitiveness will or might evolve during the next 15 years. As a result, the agile manufacturing Enterprise Forum (AMEF) was formed and the concept of agile manufacturing was introduced. i
To really understand the term Leagility we must first define what “Lean” and “Agility” means in today’s supply chain. Leanness is the production process that eliminates all sorts of waste to include time in order to ensure a level production schedule. Agility refers to the ability of an organization to exploit profitable opportunities in a volatile market place using market knowledge and virtual corporation.
For many, “Lean manufacturing” and “Agile manufacturing” sound similar, but they are not. Lean manufacturing is a response to competitive pressures with limited resources. Agile manufacturing, on the other hand, is a response to complexity brought about by constant change. Lean is a collection of operational techniques focused on productive use of resources. Agility is an overall strategy focused on thriving in an unpredictable environment based on the needs and demands of the customer. Focusing on the individual customer, agile competition has evolved from the unilateral producer-centered customer-responsive companies inspired by the lean manufacturing refinement of mass production to interactive producer-customer relationships. i
The Term Paper on Riordan Manufacturing: Supply Chain Design Paper
... customers. Riordan Manufacturing’s electric fan production plant is continually analyzing its strategies. Process flows, performance metrics, supplier relationships and supply chain efficiencies, lean ... production principles, and sales forecasting are essential to the ... are useful in identifying major turning points. The seasonal factor for each quarter ...
Leanness and agility were considered tradeoffs, but Naylor et al. propose the connection of the two paradigms with a decoupling point embedded in the value chain. The decoupling point represents the point that a customer order turns into a production plan and is depicted by the value chain strategy. The further the decoupling point moves up the value chain, the more the value chain is configured around customer pull. The decoupling point also represents the natural stockholding point to account for variability. It is critical to note, however, that agility and leanness cannot be employed at the same point in a value chain design.
Surprisingly there are many similar characteristics of leanness and agility. Table 1 shows these characteristics and how each relates to each paradigm.
Table 1
The importance of different characteristics of leanness and agility ii
Characteristic Lean Agile
Use of market knowledge Essential Essential
Virtual corporation/Value stream/Integrated supply chain Essential Essential
Lead time compression Essential Essential
Eliminate waste Essential Desirable
Rapid reconfiguration Desirable Essential
Robustness Arbitrary Essential
Smooth demand/Level schedule Essential Arbitrary
It is noticeable that the characteristics are remarkably similar with the exception of robustness and smooth demand. To be responsive, an agile manufacture must be robust, in that it must be able to respond to the changing demands of the end-user. However, a lean supply chain is only efficient under relatively smooth demand. The concept of a decoupling point in the supply chain design can make these two mutually exclusive characteristics compatible. iii
Under a networked supply chain, each participant must determine which strategy to pursue based on its customer’s requirements, where its customer is the next link in the supply chain. Ultimately the decision is based on the end-user of the entire supply chain and the ability of the supply chain to control demand through customer relationships or information technology (IT).
The Essay on Laws Of Supply And Demand
Your author has been given the responsibility of completing the demand and supply simulation and then discussing his thoughts on several questions presented before him. These questions deal heavily on microeconomics and macroeconomics with regards to managing approximately 3000 two bedroom apartments and their rentals. Your author will now address the questions as they were presented before him. ...
The decoupling point is characterized by level demand upstream and variability downstream. As a result, the upstream process is push plan, pull execution; thus the need for leanness and the downstream process is a flexible pull based on the customer’s order. The number of value streams converges at the decoupling point, as sub assemblies and components are brought together according to the end-user’s order. In this respect the decoupling point is related to postponement, and the closer the decoupling point moves downstream, the more customized the product becomes. iii
In conclusion, the term “Leagility” is based on two basic paradigms “Lean” and “Agility”. This term was introduced in the supply chain design to allow supply chains to reduce unnecessary excess and waist and to allow the chain to be flexible enough to keep up with the uncertainties and rapid changes on the demand of a product. Leanness means developing a value stream to eliminate waste, including time, and to ensure a level schedule. Agility means using market knowledge and a virtual corporation to exploit profitable opportunities in a volatile market place.
References
A review of agile manufacturing systems, 2001, vol. 39, no. 16, 3561-3600, Luis M. Sanchez and Rakesh NagIy
http://www.acsu.buffalo.edu/~nagi/pubs/paperlms.pdf
Naylor, J., Naim, M., Berry, D. “Leagility: Integrating the Lean and Agile Manufacturing Paradigms in the Total Supply Chain,” International Journal of Production Economics 1999, p.62.
The Future of Manufacturing Strategy, December 1999, Kris F. Hudgens BEng, MBA candidate and Jonathan A. McDevitt BA, MBA candidate Manufacturing Strategy, Owen Graduate School of Management
http://www.krishudgens.com/Term%20Project.htm
