The market place in today’s world has undergone revolutionary changes with respect to many factors such as competition, customer preferences, delivery locations, cost of production and lead time for new product development. These changes have affected the industrial manufacturing sector to adopt strategies that attempt to satisfy these changed needs. Lean and Agile are two manufacturing strategies applied in industrial sectors all over the world today in order to achieve this goal.
Though they are distinct in many respects, manufacturing houses today are increasingly combining the various aspects of two strategies to survive profitably. “By combining the strengths of lean and agility with renewal strategy manufacturing firms can achieve fitness and business perpetuation for economic gain” (Pham et al, 2007) Lean is a strategy for achieving the maximum productivity at the lowest possible cost by a process of continuous improvement in manufacturing achieved by systematically removing all waste in pursuit of reducing costs through optimum use of resources.
Agility, on the other hand, aims to achieve competitive performance by flexible manufacturing and quickly and efficiently responding to changing business needs. [Kidd, 1994). The all round dynamism of market place, customer needs and competition are forcing manufacturers to produce their products at the lowest cost with acceptable quality levels while at the same time offering customers more options in terms of product variables to be made available on shorter lead times with more flexible delivery.
This is exactly the case for a combination of lean and agile manufacturing concepts, strategies, techniques and systems to be put into place. As customers are increasingly asserting their control over various aspects of the product and competition is forcing to improve efficiency and reduce cost, companies have to find a way to control their own resources. i. e. , processes, materials and suppliers by adopting lean and agile manufacturing techniques. (Intermec Technologies, 2007) Relationship between Lean & Agile
Lean manufacturing emphasizes on efficiency and cost reduction while in Agile manufacturing, the focus is on flexibility, such as product attributes, configuration and delivery options without increasing the price. This makes Lean and Agile fundamentally different with conflicting ideas on processes and resource management and choosing between the two can be difficult for an organization. But there is plenty of common ground between the two models to enable companies to be lean and agile much at the same time. “Lean methodologies can be a powerful contributor to the creation of agile enterprises” (Aitken, Christopher, Towill, 2002).
Automated data collection combined with advanced communication technologies help manufacturers to become lean and agile simultaneously which is the need of the day to counter the competition and exceed the customer expectations consistently. Information technology and telecommunication developments like Industrial mobile computers and wireless networks help both lean and agile manufacturers to improve productivity, adapt to product variations, with fewer errors and less labor by distributing information and quick decision making with real-time data collection systems. (Intermec Technologies, 2007).
Lean and Agile paradigms, though distinctly differerent, are mutually complementing and can be combined in the operations of an enterprise in order to compete in the age of uncertainties that exists today. ( Naylor et al, 1999). The business environment in the 21st century calls for a market centric approach to production rather than a production centric approach to the market. From the era of making a product in huge quantities at lowest costs using lean production strategies and then finding buyers for it, manufacturers have to start the production process after they get the order from the customer. (Sanchez, Nagi, 2001)
Lean Manufacturing: Lean manufacturing as a concept emanated from a series of processes aimed identifying and reducing waste at every stage of production, introduced by Toyota in their Japanese facilities which was later hailed as Toyota Production System (TPS) (Ohno, 1988). TPS advocated a series of measures such as, “Pull” systems to avoid over-production, use of visual controls for quick identification of problems, a culture of continuous improvement etc. (Kochnev, 2007). With a clear emphasis on efficiency and quality, Lean manufacturing looks at optimum utilization of resources such as raw materials, inventory, labor and machinery.
“Lean techniques are not limited to production operations and often extend to receiving, materials management, inventory and distribution” (Intermec Technologies, 2007). Effective Supply chain management systems are used and suitable arrangements are made with the suppliers and customers by companies to avoid building up of inventories of raw material on the input side and finished products on the out put side resulting in the reduction of inventory duration from days to merely hour basis. Lower inventories mean less storage space, better utilization of the saved space, reduced intra-factory movement of materials etc.
Agile Manufacturing: Agile manufacturing, also known as “flexible manufacturing,” was first introduced in 1991 by the Iacocca Institute of Lehigh University, USA. (Kidd 1994). Agile manufacturing focuses on the ability to respond quickly to changes at an acceptable cost.. These changes could be in terms of demand volume, variety or mix of products. (Gunesakaran 1998). Manufacturers today are facing challenges like continuous customization needs, shorter product development time availability, more product variations, and higher uncertainty in terms of market dynamics and demand.
To overcome these challenges organizations need to achieve a level of flexibility in their manufacturing set up. (Ngamsirijit, 2008). This flexibility requires real time data capture, efficient communication channels and quick decision making, which in turn requires application of state-of-the-art information technology systems that enable the standard for the exchange of product model data (STEP), concurrent engineering, virtual manufacturing architecture, component-based hierarchical shop floor control system, information and communication infrastructure, and organizational and behavioral changes (Cho et al.
1996) Agile manufacturing concepts are adopted by organizations in order to quickly respond to changing market situations. The concepts are an extension of lean production techniques and are essential for manufacturing concerns across the world especially in environments where the product mix is complex and customer demand is highly variable.
The traditional dependence on economies of scale using large, central facilities has given way to a high degree of customization, the range of variations and multiple configurations driving organizations towards achieving agility, by operating multiple, small production facilities closer to their customers keeping them in the loop of a highly flexible supply chain. By doing so, manufacturers are able to allow frequent product customization resulting from changing customer preferences, just-in-time and just-in-sequence delivery, shorten the setting up of a work flow for a new product etc.
( Intermec Technologies, 2007) Comparison of Lean and Agile Manufacturing Concepts: 1. Lean manufacturing is a methodical approach to manufacture products with systematic approach to find and avoid wastages in raw materials, machinery, labor force and defects. This is done over time by consciously reviewing and correcting the aspects all processes with aim of achieving more efficiency at a higher quality levels with lesser expenses.
Agile Manufacturing, takes the concept further to adapt organizations to the changing business paradigm of uncertainties in customer preferences and market dynamics leading to infrequent demands and higher product variations. 2. Lean manufacturing provides organizations with concepts, techniques and strategies aimed at producing high quality products more economically while agile manufacturing equips the organizations with the flexibility that’s required to survive in the changing world and the changes in the customer demands.
Agile manufacturing gives a new lease of life for organizations that are looking for new initiatives to compete with the matured lean manufacturers especially in the south east Asian countries like China and Japan. 3. The techniques and strategies of Lean Manufacturing has cemented its place over the years as a very reliable means to increase productivity, maximize resource usage, reduce costs and achieve consistently high quality.
In markets that offer constant demands for products with little or no variations, lean manufacturing is well suited to provide organizations a profitable run. On the other hand, agile manufacturing enterprises are equipped to respond to rapid changes in the market and by doing so, they are in a position to take advantage of the windows of opportunities offered frequently in the highly turbulent market place of the 21st Century. ( Kidd, 2000)