The strategic integration of agile and lean supply
R. Strattona,*, R.D.H. Warburtonb
School of Engineering, Nottingham Trent University, Burton St., Nottingham NG1 4BU, UK b Grifﬁn Manufacturing, Fall River, MA, USA
Abstract Lean supply is closely associated with enabling ﬂow and the elimination of wasteful variation within the supply chain. However, lean operations depend on level scheduling and the growing need to accommodate variety and demand uncertainty has resulted in the emergence of the concept of agility. This paper explores the role of inventory and capacity in accommodating such variation and identiﬁes how TRIZ separation principles and TOC tools may be combined in the integrated development of responsive and efﬁcient supply chains. A detailed apparel industry case study is used to illustrate the application of these concepts and tools. r 2003 Elsevier Science B.V. All rights reserved. Keywords: Agile; Trade-offs; Lean; Quick response
1. Introduction Outsourcing manufacture to low cost overseas suppliers is an attractive lure in our global economy, but often undertaken without adequate regard for the market needs and the corresponding demands on the associated delivery systems. Products compete in different ways in different markets and delivery systems need to be designed with this in mind. Offshore supply offers attractive cost beneﬁts, but the trade-off is often high levels of inventory to support a slower response capability. When these higher levels of inventory are combined with volatile demand the trade-off is more signiﬁcant, with resulting obsolescence and shortages. However, what is commonly assumed is *Corresponding author. Tel.: +44-115-8482336; fax: +44-115-9486166. E-mail address: email@example.com (R. Stratton).
that one solution ﬁts all and the consequence of the mismatch is not appreciated until it is too late. The Grifﬁn Manufacturing Company (Warburton and Stratton, 2002) an apparel manufacture in North America, is an unusual case in that they survived the initial loss of work to Honduras and have now emerged with a hybrid delivery system that integrates the low cost Honduran supply with the fast response capability of the local supplier, Grifﬁn. More generally, the need to distinguish between stable functional products competing on price and volatile fashion or innovative products dependent on fast response, is now widely accepted (Fisher, 1997; Feitzinger and Lee, 1997). The terms lean and agile supply have emerged to reﬂect this distinction and various generic hybrids have been deﬁned to clarify means and ways of, at least partially, satisfying the conﬂicting requirements of low cost and fast response (Mason-Jones et al., 2000; Christopher and Towill, 2000).
0925-5273/03/$ - see front matter r 2003 Elsevier Science B.V. All rights reserved. doi:10.1016/S0925-5273(03)00109-9
R. Stratton, R.D.H. Warburton / Int. J. Production Economics 85 (2003) 183–198
The industrial relevance is clear, but there is a need to unpack these ambiguous terms, if strategically focused integration of these conﬂicting paradigms is to be logically developed to meet speciﬁc business needs. This paper interprets the lean and agile paradigms in terms of dependency, variation, inventory, and capacity before using these parameters to more clearly deﬁne the nature of the trade-off and systematically link such trade-offs to the development of established hybrids. Although generic hybrids are useful illustrations, the solution needs to be logically developed and tailored with broad involvement. Effect– cause–effect analysis is used in this process, verifying both the negative effects of the conﬂict and subsequently the positive beneﬁts of the solution. The paper concludes with these concepts and tools being applied to the Grifﬁn Manufacturing case.
2. Lean and agile supply The origins of Just-in-Time (JIT) management is closely...