Lean and agility

I. Agarwal et al. (2006) proposed a framework using multi criteria decision analysis for modelling performance of lean, agile and leagile supply chain on the basis interdependent variables. The framework provides some support for decision makers in analysing the variables affecting market sensitiveness, process integration, information driver and flexibility in enterprises operating lean, agile and leagile supply chains. A business in the fast moving consumer goods (FMCG) industry was used as a case study.

Limitations - Though Agarwal et al. (2006) has considered combining the lean and agile paradigms to evaluate some variables that affect market sensitiveness, it has neither included any variable to evaluate environmental sustainability nor considered a direction for the PLC.

II. Matching supply chains with products - Fisher (1997) discussed some directions for devising a business strategy by devising a framework that helps managers understand the nature of the demand for their products and devise the supply chain best suited to satisfy that demand. He considered aspects such as the market standards for lead times, product variety, demand predictability and product life cycles. Products were categorised into functional and innovative products. For functional products, Fisher, (1997) discussed a lean approach because of the

predictability of demand for these kinds of products, but discouraged it for innovative products.

Limitations - Though this work has considered the product life cycle, it has not considered its different stages in proposing a lean or agile direction for functional and innovative products. It also lacks a plan for environmental sustainability.

III. Aitken et al. (2006) demonstrates how a lighting company’s re-engineering effort aimed to match customer requirements and the product delivery process (PDP) by accommodating the product life cycle. The authors discussed the lean and agile paradigms and the importance of marrying them.

Limitations - This work is a demonstration of how a UK lighting company reengineered its supply chain to accommodate the impact of product life cycles;

hence it may not be easily applicable in other companies in other sectors and for other products. It discusses situations for the application of lean and agile practices but fails to address environmental concerns which lighting products are capable of causing.

IV. Manufacturing strategy linked to PLC - Luna and Aguilar Saven (2004) dealt with the decision dilemma encountered by firms producing items with different life cycles.

They identified two different decision patterns given four alternatives: lean or agile manufacturing; focused or non-focused facilities. Luna and Aguilar Saven (2004) proposed applying the lean paradigm on products presenting relatively long PLCs and low demand uncertainty and the agile paradigm on products with short PLCs and high demand uncertainty.

Limitations - Luna and Aguilar (2004) offered some direction on the application of lean and agility in production life cycle stages but failed to indicate what lean/agile practices to apply. It also lacks a solution for addressing green issues.

V. Virtual group (VG) concept - Prince and Kay (2003) argue that companies will be pressured to compete on cost in the short term within a lean production framework, while working to develop the manufacturing capability in the long term to supply to customers who can be categorized into niche markets and offered products and services that rival companies cannot easily match. Prince and Kay (2003) presented

parts to which lean and agile manufacturing strategies can be applied. It addresses the increasing pressures placed on manufacturers and are characterised by the identification of groups of machines that have the potential to form manufacturing cells. Prince and Kay (2003) argue that VGs enable the application of lean and agile concepts to different stages of production within a factory.

Limitations - The key feature of the VG concept is its ability to assign products to machines such that lean and agile practices can be applied to different groups of production equipment for optimal performance. However, considering the evaluation criteria stated earlier, the VG concept as described by Prince and Kay (2003) could not address environmental concerns. The authors also failed to state if, the VG concept could address the different market situations that arise as a result of the PLC stages.

VI. Decoupling point - Naylor et al. (1999) sought to apply the lean and agile concepts at different stages of the same manufacturing environment so that the benefits of both paradigms can be fully harnessed. They suggested that agile manufacturing concepts can be applied to the section of the supply chain under the most pressure to operate in an environment of fluctuating demand in terms of volume and variety, while lean concepts can be applied to the rest of the supply chain to encourage level demand necessary to achieve the cost benefits associated with supporting this production strategy. To achieve this, a de-coupling point was introduced to enable lean and agile concepts to mutually support each other at the operational level to improve overall performance and boost profits. A de-coupling point is essentially a point where stock is strategically held as a buffer between fluctuating demand, product variety and smooth production output (Naylor et al., 1999). It is therefore associated with product postponement strategies and is suitable in situations where the customer is prepared to wait for a customised product.

Limitations - Considering the evaluation criteria, Naylor et al. (1999)’s approach does not incorporate environmental management practices and hence could not address environmental concerns beyond areas where lean and green are synergistic. Also, the PLC concept has not been considered to address changing market situations as products proceed through their PLC stages.

VII. An Integrated approach for supplier selection - Abdollahi et al. (2015) proposed a

decision making (MCDM) (DEMATEL–ANP–DEA). This made it possible to incorporate multiple suppliers in order to determine the relative efficiencies.

Limitations - Abdollahi et al. (2015)’s framework addresses supplier selection issues, thus it may not be easily applicable for selecting optimal LAG practices. Considering the critical evaluation parameters earlier established in this chapter, Abdollahi et al.

(2015)’s framework lacks the features to effectively address environmental concerns, though it combines the lean and agile criteria in decision-making, which could address unpredictability and changing customer requirements. Furthermore, the framework has not considered features for addressing issues driven by the different stages of the PLC.