Agile manufacturing

From CEOpedia | Management online

Agile manufacturing describes a company's ability to adjust production to dynamic changes in the market and uncertainties in the corporate environment. The competitive advantage arises from offering high-quality products at a low price, which meet most individual customer needs, and the rapid adaption of products if the customer needs change. To achieve this, the latest available technology, innovative strategies, and human resources are used enterprise-wide. The advantage of agile manufacturing over other manufacturing systems such as lean manufacturing is that companies are not dependent on historical data but can work with current market data [1].

Framework of agile manufacturing

To achieve the competitive advantage described above, the right framework conditions must be in place for agile manufacturing. These framework conditions have changed over the years due to the availability of new technologies or the changing market dynamics. Thus, the framework of agile manufacturing can be categorized according to the following six blocks [2]:

  1. (Information) Technology: using increasingly advanced (information) technologies, information can be shared more effectively and efficiently within a company, and thus market dynamics can be recognized more quickly. This also increases the speed of responding to the needs of customers within the market. These advanced (information) technologies include among others enterprise resource planning (ERP), robotics, e-commerce, and cloud computing.
  2. Empowerment/ leadership support: top management's goal is to motivate the employees and thus increase productivity. This can be achieved through better coordination and communication of workers between the different workstations, but also within a workstation. Lastly, improving the sharing of information across all hierarchical levels also contributes to a successful agile manufacturing system.
  3. Customer focus: to be able to react to customers' expectations in the shortest possible time, the so-called "voice of the customer" must be considered. By listening to customer feedback, companies can more quickly identify factors that are important for the quality of their products. It is not only customers' feedback on their own products that are important, but also feedback on competitors' products.
  4. Supplier relationship: a stable supplier relationship is very important in an uncertain and turbulent environment. The continuous exchange of information between the company and its supplier can improve coordination, the identification of dynamics, and the speed of dynamics. To improve agility in this area, supplier-driven inventory and collaborative planning, forecasting, and replenishment have been particularly successful in recent years.
  5. Organizational culture: managing the growth of the organization and the planning of human resources should lead to the improvement of the feeling of togetherness and it creates an environment where workers at each level can give suggestions. Therefore, motivation and productivity increases, and workers have the feeling they can participate in the decision-making process.
  6. Flexibility: flexibility in agile manufacturing can be divided into three categories. New product flexibility allows production and offering of a large number of products with different features. Mix flexibility enables that in an uncertain environment a large number of products can be produced in the shortest possible time. And last volume flexibility allows the organization to be able to operate profitably at different levels of output

Agile Manufacturing vs. Lean Manufacturing

Both agile manufacturing and lean manufacturing systems have gained high recognition in operational manufacturing paradigms of the 21st century. Agile manufacturing can be seen as a further development of lean manufacturing due to its later development, however, the literature is divided as to whether both systems can exist side by side in a company. The following differences between agile manufacturing and lean manufacturing can be identified [3]:

More anchored in agile manufacturing

  • Knowledge management
  • Flexibility
  • Manufacturing technology

More anchored in lean manufacturing

Examples of Agile manufacturing

  • Just-in-Time (JIT) Manufacturing: JIT manufacturing is a process in which production is scheduled and executed only when an order is received, which reduces waste and inventory costs. This system allows companies to quickly respond to customer demands and reduce production costs.
  • Modular Manufacturing: Modular manufacturing is a process in which individual components are made in separate modules and then assembled to make a complete product. This system allows companies to quickly adjust production to changing customer needs.
  • Mass Customization: Mass customization is a process in which products are designed and produced in small batches according to customer needs, allowing companies to quickly respond to customer demands.
  • Computer-Integrated Manufacturing (CIM): CIM is a process in which computers are used to control, manage, and monitor the entire production process. This system allows companies to quickly adjust production to changing customer needs and market conditions.

Advantages of Agile manufacturing

Agile manufacturing has many advantages over other manufacturing systems. It provides businesses with the ability to quickly adapt their production to changes in the market and corporate environment. Specifically, the advantages of agile manufacturing include:

  • Increased responsiveness to customer needs: Agility enables businesses to quickly adjust manufacturing processes to meet customer demands. This allows companies to create products tailored to the needs of the customer and respond to changes in the market.
  • Reduced costs: By using the latest technology, innovative strategies and real-time data, businesses can increase their efficiency and reduce costs. This helps them remain competitive and maintain a low cost of production.
  • Faster product cycle: Agile manufacturing allows businesses to develop, produce and deliver products faster than other manufacturing systems. This gives them a competitive edge in the market and helps them to stay ahead of their competitors.
  • Improved quality: The use of real-time data and quality control systems enable businesses to produce higher quality products. This improves customer satisfaction, increases sales and helps businesses to maintain a good reputation.

Limitations of Agile manufacturing

Agile manufacturing has several limitations, including:

  • Cost: Agile manufacturing can be expensive to implement, as it requires the latest technology and strategies, as well as specialized human resources.
  • Flexibility: Agile manufacturing systems are typically very complex and require a high degree of flexibility and adaptability, which can be difficult to achieve.
  • Risk: Agile manufacturing systems involve a high degree of risk, as the system requires the ability to quickly and accurately adapt to changes in the market.
  • Complexity: Agile manufacturing systems are often highly complex, with many different components that must be coordinated in order to achieve success.
  • Resource Availability: Agile manufacturing systems require a large amount of resources, including technological capabilities and skilled personnel. This can be difficult to obtain in some areas.

Other approaches related to Agile manufacturing

Agile manufacturing is a dynamic, customer-oriented approach to production that offers real-time adaption to changing market needs. There are several other approaches related to agile manufacturing, such as:

  • Just-in-time (JIT): JIT is an inventory control system that eliminates waste by producing and delivering items when they are needed. JIT also helps reduce costs by reducing the need for storage space, inventory costs, and production time.
  • Total Quality Management (TQM): TQM is an approach that seeks to continuously improve quality by identifying and correcting problems in the production process. It involves all aspects of the production process and requires continual monitoring and evaluation to ensure the highest quality standards are maintained.
  • Lean Manufacturing: Lean manufacturing is an approach that seeks to reduce the amount of waste and unnecessary activities in the production process. It involves the elimination of non-value added activities, such as overproduction and excessive inventory, to reduce costs and increase efficiency.
  • Six Sigma: Six Sigma is an approach to improving business processes and products by eliminating defects and reducing variation. It is based on a set of statistical tools and techniques that help to identify, analyze, and improve processes.

In summary, agile manufacturing is a dynamic approach to production that seeks to deliver products quickly and efficiently, while other approaches related to agile manufacturing such as Just-in-Time, Total Quality Management, Lean Manufacturing, and Six Sigma focus on further improving the efficiency and quality of the production process.


  1. Gunasekaran et al., 2019, pp. 4-5; Iqbal et al., 2020, p. 751; Kumar et al., 2019, pp. 162-163
  2. Dubey & Gunasekaran, 2015, pp. 2147-2150; Kumar et al., 2019, pp. 165-166
  3. Iqbal et al., 2020, pp. 750-751, 763

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Author: Janina Klüsch