Agile and Lean Supply Chain Management

Leanness means developing a value stream to eliminate all waste, including time, and to ensure a level schedule. Agility means using market knowledge and a virtual corporation to exploit profitable opportunities in a volatile marketplace. Leagile is the combination of the lean and agile paradigms within a total supply chain strategy by positioning the decoupling point so as to best suit the need for responding to a volatile demand downstream yet providing level scheduling upstream from the marketplace. The decoupling point separates the part of the organisation (supply chain) oriented towards customer orders from the part of the organisation (supply chain) based on planning. In this report, I attempt to prepare the literature review of five papers ranging from 1999 to 2011 regarding development and application of lean, agile, and leagile to supply chain management. Naylor et al. (1999) analysed lean and agile manufacturing paradigms and integration between them so called leagile in supply chain management for the first time. They highlighted and rated some of the prerequisite characteristics of the lean and the agile paradigms in supply chain management and then categorized and compared them into three sections, equal, similar and different characteristics. Furthermore, some simplified structures were presented with the decoupling point in different positions along the supply chain. By varying the position of the decoupling point five distinct classes of supply chains were indicated, buy to order, make to order, assemble to order, make to stock, and ship to stock. They realized that the lean paradigm can be applied to the supply chain upstream of the decoupling point as the demand is smooth and standard products flow through a number of value streams and the agile paradigm must be applied downstream from the decoupling point as demand is variable and the product variety per value stream has increased. This study indicated agile manufacturing paradigm was best

References: Agarwal, A., Shankar, R., Tiwari, M.K., 2000, Modeling the metrics of lean, agile and leagile supply chain: An ANP-based approach, European Journal of Operational Research, 173 (1), pp. 211-225 Aronsson, H., Abrahamsson, M., Spens, K., Developing lean and agile health care supply chains, Supply Chain Management: An International Journal, 16/3, 176–183 Bruce, M., Daly, L., Towers, N., 2004. Lean or agile: A solution for supply chain management in the textiles and clothing industry? International Journal of Operations and Production Management 24 (2), 151–170. Mason-Jones, R., Naylor, B., Towill, D.R., 2000, Lean, agile or leagile? Matching your supply chain to the marketplace, International Journal of Production Research 38/17, 4061– 4070. Naylor, J. B.,Naim, M.M., and Berry, D., 1999, Leagility: integrating the lean and agile manufacturing paradigm in the total supply chain, Engineering Costs and Production Economics, 62, 107-118. 3