The Difference Between Agile vs. Lean supply chain management is about reducing costs and lowering waste as much as possible. Additionally, companies with high volumes of low variability purchase orders, such as food items, benefit their efficiency greatly by utilizing the lean supply chain methodology. What is Agile Supply Chain? Richard Wilding, professor of Supply Chain Strategy at the Cranfield School of Management in the UK, says if you have low volumes but high variability you need agility.
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The Difference Between Agile vs. Lean supply chain management is about reducing costs and lowering waste as much as possible. Additionally, companies with high volumes of low variability purchase orders, such as food items, benefit their efficiency greatly by utilizing the lean supply chain methodology.
What is Agile Supply Chain? Richard Wilding, professor of Supply Chain Strategy at the Cranfield School of Management in the UK, says if you have low volumes but high variability you need agility.
He uses Kimberly Clark, owners of such brands as Kleenex and Huggies, as an example. When Kimberly Clark has a product promotion they need market information. They collaborate with customers, learn about their market forecast and integrate with commercial teams to ensure that manufacturing has a must respond mentality.
Agile supply chains demand good processes — and processes are established by people. Can your partners integrate with an agile supply chain system? And, finally, can you wait until the very last possible minute to buy? So, as you can see, both agile and lean supply chain management have benefits. But, the choice is up to you! You just have to know when to use either method! By applying the correct functions, your company will be able to save money and be able to easily adapt to rapid fluctuations.
What is an Agile Supply Chain?
Lean supply chains focus on cutting out unnecessary business practices and wasting fewer resources while maintaining or improving delivery of their product to customers. Agility is a comprehensive response to the business challenges of profiting from rapidly changing, high flexibility orientation, advanced level of customised products and services. This strategy aims to obtain flexibility and competitiveness in a cost-effective manner. In order to achieve the combination of lean and agile ideas, a decoupling point is introduced. From the upstream material supply part to the decoupling point, because the uncertainty of raw materials and product components are relatively low, the supply chain partners can adopt lean strategy to minimise supply costs and inventory restraining this part. From the decoupling point to the downstream final customers, because the uncertainty of customer demand and final products are high especially in many modern markets, supply chain partners can implement agile strategy to obtain high flexibility and responsiveness to satisfy customers.
The Difference Between Agile vs. Lean Supply Chain Management
Both management strategies have their advantages and disadvantages, and the question is, is it possible for them to exist side by side, or even fuse? In their article A taxonomy for selecting global supply chain strategies, Christopher, Peck and Towill describe a fusion of Lean and Agile, termed LeAgile. Where did leagile come from? Already in , Naylor et al. What does leagile mean?
Lean + Agile = LeAgile: a happy marriage?
The debate continues over the decision to develop a lean supply chain, an agile supply chain, or a hybrid model: leagile. The ultimate goal of lean thinking is to eliminate waste. Muda is work that absorbs resources but adds no value. Mura is the waste of unevenness or inconsistency leading to an erratic flow. Muri is to cause overburden, stretching resources beyond their limits. Taiichi Ohno identified 7 wastes that absorb resources but adds no value. Transport: The unnecessary movement of materials and products Inventory: Excess stock held without reason Motion: The unnecessary movement of resources to conduct an activity Waiting: Interrupting the constant flow of material or information Overproduction: Making more than is required Over-processing: Conducting operations beyond the needs of the customer Defects: Poor quality leading to rejects and rework Agile Supply chain Agility is a business-wide capability that embraces organisational structures, information systems, logistics processes and, in particular, mindsets.