Lean and Agile Supply Chain Strategies
| Lean and Agile Supply Chain Strategies | Seminar in Business Economics | | 30-03-2012 |
Table of Contents Introduction 2 Subject 2 Purpose 3 Problem Formulation 3 Definition of Concepts 4 Theory and Methodology 5 Limitations 6 Structure 6 Exploratory Analysis 7 Lean Supply Chain: Toyota Motor Corporation 7 Agile Supply Chain: Dell 9 Comparison of the Two Strategies 10 Leagile Supply Chain: Hennes & Mauritz 12 Discussion 15 Summary and Conclusion 17 List of References 19
Introduction
Subject
Efficient supply chain strategy is crucial for businesses as it helps companies to achieve their most important goal – customer satisfaction. It assures that products are delivered on time, to the right location and with the right quality. Furthermore, it contributes to improving the financial position of the company, as it is targeted at reducing operating costs by decreasing purchasing and production costs.
“A key feature of present day business is the idea that it is supply chains that compete, not companies, and the success or failure of supply chains is ultimately determined in the marketplace by the end consumer.”
Therefore, an effective supply chain strategy can easily become company’s competitive advantage. The supply chain consists of multiple activities such as purchasing of raw materials, manufacturing, distribution, and customer relationship management (CRM). Michael Porter points out that while a separate activity can be imitated and even outperformed quite easily by your competitors through technology and innovation, linked activities are impossible to imitate, which leads to a unique competitive advantage.
In this paper, I will discuss two supply chain strategies: lean and agile. In today’s competitive environment, it is not enough to be just “lean” or “agile”. In order to be successful, a company needs to be both. These paradigms are not opposites or mutually exclusive, but rather, they complement each other.
Table of Contents Introduction 2 Subject 2 Purpose 3 Problem Formulation 3 Definition of Concepts 4 Theory and Methodology 5 Limitations 6 Structure 6 Exploratory Analysis 7 Lean Supply Chain: Toyota Motor Corporation 7 Agile Supply Chain: Dell 9 Comparison of the Two Strategies 10 Leagile Supply Chain: Hennes & Mauritz 12 Discussion 15 Summary and Conclusion 17 List of References 19
Introduction
Subject
Efficient supply chain strategy is crucial for businesses as it helps companies to achieve their most important goal – customer satisfaction. It assures that products are delivered on time, to the right location and with the right quality. Furthermore, it contributes to improving the financial position of the company, as it is targeted at reducing operating costs by decreasing purchasing and production costs.
“A key feature of present day business is the idea that it is supply chains that compete, not companies, and the success or failure of supply chains is ultimately determined in the marketplace by the end consumer.”
Therefore, an effective supply chain strategy can easily become company’s competitive advantage. The supply chain consists of multiple activities such as purchasing of raw materials, manufacturing, distribution, and customer relationship management (CRM). Michael Porter points out that while a separate activity can be imitated and even outperformed quite easily by your competitors through technology and innovation, linked activities are impossible to imitate, which leads to a unique competitive advantage.
In this paper, I will discuss two supply chain strategies: lean and agile. In today’s competitive environment, it is not enough to be just “lean” or “agile”. In order to be successful, a company needs to be both. These paradigms are not opposites or mutually exclusive, but rather, they complement each other.
References: 1. An Integrated Model for the Design of Agile Supply Chains by M. Christopher and D. Towill (2001). 3. Disentangling leanness and agility: An empirical investigation by R. Narasimhan, M. Swink and S. W. Kim (2006). 7. Dell: Annual Report (2010). 8. Dell: Annual Report (2010). 9. H&M: Annual Report (2006). 10. H&M: Annual Report (2010). 11. H&M: Annual Report (2010). [ 3 ]. R. Narasimhan et al. (2006), page 444. [ 8 ]. Dell’s Annual Report (2010) [ 9 ] [ 10 ]. H&M Annual Statement (2010) [ 11 ]