General Electric Medical Systems, 2002.

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The agile supply chain:

Marketplace if the 21 century are often characterised by proliferation(увеличение) of products and services, shorter product life-cycle and increased rates of product innovation. There it is not enough today to simply response at the right time in different customers’ needs of such marketplace. The main aim of logistics today is to ensure that it is the right product that is delivered in the right place at the right time. And different tools of agile supply chain are really suitable in such situation because they help to increase speed capabilities in the SC. Moreover it is important to admit that in such market environment is impossible to use lean principles because these principles can be applied only for the markets with stable and predictable demand. But in situation where demand is unpredictable and customers requirement for variety is high the elimination of waste becomes a lower priority that the need to respond rapidly to a turbulent marketplace.

4 concepts of agile SC:
There are some characteristics of agile supply chain:

1) Customer responsive – it means that SC can understand and satisfy end-customer needs. It means that SC becomes demand-driven not forecast-driven. One of the best way of being demand-driven is to use information technologies to get data on demand direct from the point-of-sale and quickly response to it. (Zara and H&M). 2) Network-based – SC should be viewed as a network of partners who have a common goal to collaborate together in order to respond end-customer needs. 3) Process integration – it means viewing the network as a system of business processes. And integration of these processes creates power and synergy for the network. Such processes that are not support create penalties in terms of time, costs and quality for the whole network. 4) Virtual – the use of information technology to share data between buyers and suppliers creates virtual SC. Such SC is more information-based rather that inventory-based. Electronic data interchange (EDI) and the Internet have enable partners in the SC to act upon the same data about demand. (можно ex. P205 в конце.)

When we should use lean and when agile SC and when both:

In order to understand when we should use lean and when agile it would be better to compare different attributes of both of them. Mason-Jones et.al. (1999) developed a comparison between agile and lean SC. 1) Lean SC is oriented on more commoditise product when agile SC in focused on fashion goods. 2) For lean SC predictable demand is important but if demand is unpredictable the elimination of waste becomes a lower priority and agile principles should be used 3) Lean SC is oriented on low product variety with long life-cycle meanwhile agile SC works with high variety of products with short life-cycle. 4) In terms of customer drivers lean SC oriented on cost but agile SC on availability. 5) Lean SC focus on eliminating waste but agile SC customers and market. 6) Lean SC oriented on work standardization when agile SC focus on operator self-management to maximize autonomy. 7) The main aim of lean SC is productivity increase and costs reduction but agile SC is oriented on customer satisfaction. But there is no reason why we should use only lean or only agile SC approach. Many SCs can adopt a ‘lean’ principles for its upstream operations and then ‘agile’ principles for downstream. It helps to create high-productivity and low-cost at the beginning and responsive processes to allow high levels of customization thereafter. Such combination of lean and agile is called ‘leagility’. (Пример) Low

High
Low
High
Volume
Variety / Variability
“Lean” works best in
high volume, low
variety and predictable
environments.
“Agility” is needed in
less predictable
environments where
the demand for variety
is high.

Demand/Supply characteristics determine
supply chain strategy
Predictable
Unpredictable
Long
Lead-time...
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