SUPPLY CHAIN

Supply Chain

Supply Chain

What is flexibility for Lean manufacturing? There's the beginnings of a good discussion on flexibility and what it means for Lean manufacturing on the Lean blog, posted Thursday September 7th. Blogger Luke Van Dongen notes that flexibility is sometimes used interchangeably with Lean. Flexibility refers mostly to a traditional philosophy on capacity and capital equipment and Lean philosophy more on ability to respond to customer demands through reasonable customer service policies and leveled production schedules.

What is flexibility? Flexibility is the opposite of stiffness. Flexibility is the ability to expand or contract in response to pressure. Flexibility is the ability to adapt to new, different or changing requirements. Flexibility is measure of the ability of a company to respond to changes in demand. Flexibility is one of those metrics that gets added on but rarely defined in concrete terms by manufacturing executives, as in "We need to focus on quality, cost, speed, and flexibility." Flexibility is usually snuck onto this agenda by marketing and sales folks, if the said executive is not one herself. With lean process the aim is to achieve a just-in-time system. Justin-time means that materials are received directly into production from suppliers just when required. This means that suppliers have to be geared up to deliver to the right specification and on time. With just-in-time supply there is no room for errors in specification, or late delivery.

In order to achieve the agility of supply as demanded by justin-time the infrastructure will have to be flexible in product design, workstation design and capacity and scheduling management. Initial observations may suggest that characteristics of flexibility and lean appear to be in conflict, e.g. flexibility aims for a buffer and lean aims to eliminate waste. However, the aims of optimizing designs and responsive agile customer service are the same for both flexibility and lean.

Our strategy should be to improve our flexibility instead of depending on forecasting algorithms. The best way to improve performance and customer service is to create a highly responsive manufacturing and supply operation. Flexibility is usually achieved by adequate capacity, inventory and agile scheduling (e.g. kanban, see below). The cost of becoming flexible is often relatively small investment with greater returns. It is also a great insurance policy in case supply chain forecasting falls short of promises.

Having developed this provide a convenient and useful conceptual framework for us to consider the lean vs agile debate as per the diagram below.  Lean, with its efficiency focus, is more suited to relatively stable markets where cost (and therefore the risk of substitution) is an issue.  Agile, on the other hand, with its focus on responding quickly to market needs, is better suited quickly changing markets such as are experienced by fashion goods.  Complex products having uncertain demand being better suited to a project management style of control.  This leaves the fourth quadrant which was deemed to be under the remit of the approach recently coined as 'leagile'.

Leagile supports the view that both lean and agile practices ...