Practical Ways of Marrying the Lean and Agile Paradigms

Practical Ways of Marrying the Lean and Agile Paradigms

As we have indicated, there are a number of common elements between the lean and agile paradigms. Provided the whole concept is fully thought through and properly managed, lean and agile businesses can co-exist, even when on the same site and with some limited rotation of personnel. Here are three proven ways in which the paradigms have been brought together to provide available and affordable products for the end customer.

The Pareto Curve Approach

Many companies manufacturing or distributing a range of products will find that the Pareto Law will apply and can be exploited to determine supply strategy. Typically an analysis of the business will show that the 80/20 (or similar) rule holds. In other words, 80% of total volume will be generated from just 20% of the total product line. The way in which these 20% are managed should probably be quite different from the way the remaining 80% are managed. For example it could be argued that the top 20% of products by volume are likely to be more predictable and hence they lend themselves to lean principles of manufacturing and distribution. The slow moving 80% on the other hand will typically be less predictable and will require a more agile mode of management.  one generic way in which supply chain strategies may be devised for the predictable 20% and the more volatile 80% of products.

The De-coupling Point Approach

A further marrying of the lean and agile paradigms can be achieved through the creation of a ‘de-coupling point’ using what may be termed strategic inventory. Here the idea is to hold inventory in some generic or modular form and only complete the final assembly or configuration when the precise customer requirement is known.. This concept of ‘postponement’ is now increasingly widely employed by organizations in a range of industries.,by utilizing the concept of postponement, companies may utilize lean methods up to the de-coupling point and agile methods beyond it. Companies such as Hewlett Packard have successfully employed such strategies to enable products to be localized much closer in time to actual demand .However,  satisfying customer demand may require particular combinations of postponed manufacture and postponed logistics A parallel concept to the ‘material’ de-coupling point described above is that of the ‘information’ de-coupling point. This represents the furthest point upstream to which information on ‘real’ demand flows i.e. information which has not been distorted by inventory policies such as re-order points and re-order quantities. The ability to base replenishment decisions on real demand clearly contributes to supply chain agility.

Problems That existed 

Under the production processes, there are three major problems within the company that must be addressed.  The first problem is the unnecessary/excessive movement of work in process within the company.  This causes inefficiencies in the production processes which results in unnecessary high production lead time and increased workload.  . The second major problem is the long lead time for order delivery.  The third major problem is related with product quality.  Normally, 10 to 15% of finished products are not up to standard and usually rejected by customers.  All of these products cannot be reworked, but rather has to be scrapped.  In addition, it is difficult to identify the responsible person for  defective items. 

Conclusion

In developing an integrated system,an organisation must use a holistic approach in incorporating systems.todays market s are increasingly volatile and hence less predictable and so the need of the more agile response has grown.Putting this top ideas leads us to the conclusion that an integrated manufacturing system is a pre-requisite for success in todays global market.

Hope its gives you an insight on agile manufacturing !!!