Agile manufacturing

From CEOpedia | Management online
Agile manufacturing
See also

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

Footnotes

  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

References

Author: Janina Klüsch