Agile Manufacturing

The need for manufacturing agility in today’s
economic climate
Expert Opinion by Andy Brown
In today’s global market the challenges of managing high levels of demand are now
less prominent. Where efficiency, service and capacity utilisation have traditionally
been the main objectives, these have been replaced with other challenges which
could remain for the next 3 years or more.
On the demand side, there has been an increase in product complexity and
diversity driven by ever more discerning and selective customers. The demand,
however, is considerably less predictable as customers recognise that capacity is
no longer constrained and therefore look to trade off suppliers to gain the shortest
lead times at the lowest cost. In addition to this, there is a need to continually
improve value to the customer, whilst reacting to the ever-changing ‘green agenda’.
The impact of the recession on lending and general deflationary pressures make
finding business investment more challenging than ever before and as the global
economy moves out of recession, it will re-structure based on who can move out of
recession first – this may fundamentally change manufacturers’ customer base and
the markets they serve.
On the supply side, manufacturers have to face up to managing increased spare
capacity and make tough choices on how and where they make products and fulfil
demand. To achieve this, manufacturers will have to: respond quickly and frequently
to changes in product mix; maintain optimal inventory levels; and maximise both
production process capacity and raw material utilisation.
Manufacturers will also need to build the capability to accurately and efficiently
communicate requirements to suppliers, ensuring they can respond to plans and
identify potential vulnerabilities.
In all these challenges manufacturers must be agile to support the market’s demand
for sustainable products and supply chains.
Is Agile Manufacturing the
next step after Lean?
Firstly, it’s probably worth covering some fundamentals.
Organisations that employ ‘lean’ manufacturing
techniques drive efficiencies out of the activities they
are in control of, whereas organisations that use ‘agile’
techniques are better at managing activities, or reacting
to the circumstances they are not in control of. Wikipedia
explains the difference between lean’ and ‘agile’ as being
the same as the difference between thin and athletic.
For many, lean manufacturing is seen as a set of
techniques and tools to identify and eliminate waste,
thus improving quality and reducing cost – it is therefore
well suited to relatively stable markets where cost is
the main concern of the customer. Agile, however,
is more focused on responding rapidly to customer
demands and market trends, and is therefore suited
to fast-changing markets and especially some CPG
sub-sectors like fashion, food and hi-tech.
In reality though, organisations can benefit from both
lean and agile approaches to manufacturing and
supply chain management – a balance of lean and
agile approaches is referred to a leagile.
So what elements form the core of an agile
manufacturing model?
»» Lean product innovation – efficiently developed
products and short time to market in order to
maximise growth and profitability
»» Planning – manufacturing strategy is aligned with
overall business strategy. Demand and supply
planning balances business needs with constrained
supply resources. Manufacturing planning ensures
most effective use of manufacturing assets to meet
short-term customer demand
»» Supply chain re-engineering – the global supply
network is re-engineered to ensure the highest
levels of customer service at minimum cost
»» Leagile production – development and
management of efficient and flexible factories where
waste is eliminated
»» Design to manufacture – highly developed
integrated processes that support rapid response
to changes in supply and demand types, short lead
times, and flexible service.