In the context of the current market economy, paradigms prove to be, not only valuable lenses but also and more importantly, as that which generates and cradles innovation in terms of ensuring the development of efficient mechanisms and schemes in manufacturing and supply chains. It is with this particular context that lean thinking and agile manufacturing paradigms were developed. Naylor, et al. (1999) provided a definition of leanness and agility: “Leanness means developing a value stream to eliminate all waste, including time, and to ensure a level schedule” (1999, p. 108).
Given such a definition, one may infer that leanness puts premium on the maximisation of the overall resources that are needed in the entire process so as to meet the schedules. “Agility means using market knowledge and a virtual corporation to exploit profitable opportunities in a volatile market place” (Naylor et al. 1999, p. 108). Since the market is volatile, companies should be able to foresee trends that are profitable to venture into. The leagility paradigm envisions the possibility of combining lean and agile manufacturing paradigms; that is, agility combined with lean capabilities within a single supply chain.
A supply chain, according to J. Stevens (1989) is “…a system whose constituent parts include material suppliers, production facilities, distribution services and customers linked together via a feed-forward flow of materials and feedback flow of information” (Naylor et al 1999, p. 108). In terms of its technological requirements, companies should provide the needed mechanisms to ensure the smooth flow of information as it moves within the entire supply chain; that is, from the end-user or customer to the supplier.
These mechanisms may vary from company to company depending upon the nature of the company, the products they produce and the kind of supply chain they use. What Naylor, et al (2009) recommend is for companies to use an “integrated supply chain” for the simplification, streamlining and optimisation of both information and material flow in the entire supply chain (p. 110). This part of the essay will discuss the attitudinal and process requirements of the leagility paradigm.
In its attempt to combine leanness and agility, the leagility paradigm is committed to the view that supply chains can be lean in terms of the upstream from postponement applications and the information decoupling point are concerned; and agile in terms of the downstream from the information decoupling point. In terms of the attitudinal aspects, for the most part, it is the discretion of the companies. Some companies put premium on “the service levels at the cost of reducing costs” (Naylor et al. 1999, p. 117).
There are two ideas that are at work in the process: responsiveness and efficiency. In the event that the assembly is postponed until customer orders are received, the operation has to be agile in terms of responding to customer requests and queries. Prior to this point, operations can be organized under the lean concept of waste elimination with an emphasis on efficiency. Thus integrated supply chains may require agility or leanness in their operations, depending upon which part of the process and which part of the supply chain we are dealing with.
Lean manufacturing is called lean as it uses less, or the minimum, of everything required to produce a product or perform a service” (Womack et al. 1990, quoted in Naylor et al. 1999, p. 110). By so doing, leagility allows companies to maximise their benefits. Naylor, et al. (1999) provided a distinction between the two paradigms in terms of their characteristics. Agile manufacturing, as Naylor, et al. contend, put premium on “rapid reconfiguration” and will only “eliminate as much waste as possible” since the latter is not a prerequisite (1999, p. 111).
On the other hand, lean manufacturing focuses on the elimination of “non-value-adding activities, or muda” and the supply chain, in this case will be “as flexible as possible” (Naylor et al. 1999, p. 111). Flexibility, in this case, is also not a prerequisite. Given the two paradigms, the initial response is to choose from the two as if they are irreconcilable. The leagility paradigm shows that such is not necessarily the case because it is the end-user or customer (and ultimately, the market) which will dictate the outcome of this apparent dilemma. Naylor et al. 1999) believed that whether we take the side of the lean or the agile paradigm, their utmost concern is the same; meeting the demands of the clientele.
“Businesses must work together to form an integrated supply chain focusing on meeting the demands of the end-user or final-customer of the supply chain no matter what paradigm is adopted” (Towill 1997, quoted in Naylor et al. 1999, p. 110). In the literature, the leagility paradigm encounters unavoidable difficulties. As Herer, et al. (2002) note, the concept of leagility heavily relies upon “the identification of the decoupling point” which is made possible by “postponement” (2002, p. 01). The concept of leagility then, as it relies on postponement in order to identify its appropriate decoupling point in the supply chain, remains a difficult concept to apply in practise.
“Postponement, however, typically necessitates modifications in product and process designs as well as in organizational relationships. Such modifications may be costly and time consuming” (Herer et al. 2002, p. 211). In the final analysis, one may agree with the criticism put forth by Herer, et al. (2002) since postponement entails responsiveness on the part of companies to their customer’s needs and queries.
Postponement builds up the expectation of the customers. Hence, companies need to modify the products, services, and the processes that are involved in the entire production and distribution. As I reckon, the concept of leagility put forth by Naylor, et al. is not restricting. In fact, it is theoretically coherent. However, the viability and appropriateness of leagility, when applied to supply chains, remains an open question whether or not it will succeed in actual corporate business practise. The foregoing remark points out a perennial problem; that is, bridging the gap between theory and practise.
Courtney from Study Moose
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