Whilst Lean advocates and traditionalists need to embrace Six Sigma, it is neces-sary to view agile manufacturing from a similar perspective. Every process has the potential for error, and the principle behind this is to look at all the ways in which things can go wrong, especially in the eyes of the customer, and try and eliminate the defects. Take for example the business of a planning application to a local authority. The process begins with your first call to the planning department.
Various things can go wrong, namely you can be placed in a queue and have an unacceptably long wait, you can be passed between departments, or when you receive the document, you notice that your details have been recorded incorrectly or that you are being charged a higher amount than you were quoted in the phone call.
Six Sigma also looks at“excessive variation in processes”—for example, the same X-ray on the same machine with the same operator may take 15 min one day and 21 min the next. Why? How can we reduce this variation?
Leagile—a hybrid strategy of Lean and Agile manufacturing
The term“agile manufacturing” refers specifically to the operational aspects of a manufacturing company which accordingly, try to translate into the ability to produce customised products at mass production prices and with short lead times.
Agile manufacturing is a new idiom that is used to represent the ability of a producer of goods and services to survive and flourish in the face of continuous change. These changes can occur in markets, technologies, business relationships, and all other facets of the business enterprise. Agile manufacturing can be defined as the capability of surviving and prospering in a competitive environment of continuous and random change by reacting quickly and effectively to changing markets, driven by customer-designed products and services. The relation between agility andflexibility is extensively discussed in the literature. It has been proposed that the origins of agility lie inflexible manufacturing systems. Consequently, these
firms need a number of distinguishing attributes to promptly deal with the changes inside their environment. Such attributes include four main elements:
• responsiveness,
• competency,
• flexibility/adaptability, and
• quickness/speed.
The base for agility is the amalgamation of information technologies, staff, business process organisation, innovation, and facilities into main competitive attributes. The main points of the definition of various authors may be summarised as follows:
• high-quality and highly customised products,
• products and services with high information and value-adding content,
• recruitment of core competencies,
• responsiveness to social and environmental issues,
• combination of diverse technologies,
• response to change and ambiguity demand, and
• intra-enterprise and interenterprise integration.
Agile manufacturing aims to meet the changing market requirements by suitable alliances based on core competencies, by organising to manage change and uncertainty, and by leveraging people and information. Agile manufacturing does not represent a series of techniques much as it represents an elementary change in management philosophy. It is not about small-scale improvements, but and com-pletely different way of doing business with a primary emphasis onflexibility and quick response to the changing markets and customer needs. The competitive nature of the organisation’s market is undeniably regarded to depict instability;
research (Wang and Feng2011; Krishnamurthy and Yauch2007; Wang and Feng 2011) reflects that in these types of circumstances, a dependence upon Lean sys-tems alone may be restrictive and that existence necessitates the embracing of agile methods. It is essential that manufacturing is able to adapt to changes, and improve the technical support ensuring that it remains at a high level whilst reducing the time to market with shorter production runs since it operates in a bespoke market. It is considered that independently that neither of these strategies would provide a competitive advantage. The ideology of Lean attempts to eradicate waste from the processes whilst endeavouring to provide equilibrium and optimise the workflow in order to secure effectiveness.
A properly implemented Lean system would ensure:
(i) Waste is located and removed within production which reduces costs and improves capacity;
(ii) Assists to instigate a culture of continuous improvement;
(iii) Looks for an opportunity to develop quality levels; and (iv) Lessens risks through testing and responses at each stage.
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Agile manufacturing, on the other hand, offers other advantages, namely:
(i) possible solutions in order to get products to the market quicker whilst shrinking development cycles;
(ii) projects not performing well are isolated quickly which reduces the risk of further waste; and
(iii) priority alterations can be accommodated at a lower cost.
Organisations need to manage this process of instilling the hybrid strategy;
research reveals that leagile can operate very well, even on the same site when assisted by a restricted rotation of staff. The empirical evidence advocated amongst others and Wang and Feng (2011) suggest three possibilities through which the concept could be adopted by the organisation:
(i) Pareto curve approach: it could be forwarded that the top 20 % of the products by volume are prone to be more certain and would then provide an oppor-tunity to operate the Lean doctrine. Equally the slow moving 80 % which are potentially less predictable and could utilise the agility principles.
(ii) Decoupling point: the principle behind this is that stock can be held in a modular form but proceed to completion or construction once the precise customer specifications are known. Consequently, organisations should use the Lean methodology up to decoupling point and agile for the remaining process.
(iii) “Information” decoupling is operated on the similar lines except centres upon information which has not been twisted by stock management procedures such as reorder processes.
Leagility would prove beneficial for organisations as Lean and agile can accompany each other; the decoupling point could be used effectively by the or-ganisations since the supply chain implications would have to be managed effec-tively. Any increase to the organisation’s product or a change in the volumes would enable the decoupling point to shift upstream which would consequently make the supply chain more agile. The culture at the respective organisations needs to accommodate outsourcing more of its non-core company processes. The research provides ample examples of third party logistics (3PL) organisations, for instance, which provide a practical service on purchasing, logistics, and the routine com-ponents of product design and repair as reflected by Wang and Feng (2011). Leagile principles support this since they can be viewed as a method to create additional high value functions for the respective company.
Whilst agile manufacturing plays prominence to flexibility, it does provide a possibility for the organisation to be more effective and reduce the lead time in influencing change which will promote the organisation as opposed to its com-petitors. The Lean approach will permit the organisation to offer products to its customers at a high quality and lower prices; this will be possible as the costs should decrease as less stock will be necessary and more efficient processing made possible. Agile will allow the organisation to join potential markets whilst being more competitive with bespoke customers. Similarly, organisations need to
consider hybrid processes which are integral to leagile organisations; there is a necessity to ensure that there is in existence a high degree of association between the organisations’ requirements and the process characteristics.
Yusuf and Adeleye (2002) were able to demonstrate that a broader array of competitive competences and performance levels of agile organisations correlated considerably and positively; however, similarly, such associations were only able to witness in these cases a constricted variety of capabilities and performance levels within the Lean organisations. Consequently, the evidence suggests that challeng-ing concurrently on numerous competitive capabilities augment performance levels in a greater depth than would be the case when competing upon factors such as cost and quality alone. Likewise, leagile organisations embrace the formation of virtual organisations; this should be encouraged since it provides any organisation with an opportunity to deal with unforeseen variations in a more agile fashion. The pos-sibilities for the organisation are as follows:
(i) Expand its flexible knowledge supply chain which will enable higher pro-duction runs permitting greater economies of scale;
(ii) Establish international alliances with other companies in order to broaden its product line or to fill its existing portfolio gaps;
(iii) Facilitate an integration of numerous distinct business entities through the advantages offered by sophisticated information technology; and
(iv) This offers the organisation considerable market strength; the virtual organi-sations merge their respective proficiencies with other partners in order to accommodate a particular mission that no individual organisation would be able to cope with.
Leagile philosophy assists to inform the company regards make or buy deci-sions. The prevailing situation dictates a harsh decision for any organisation. Crude oil prices and transportation outlays have escalated; this then emphasises the sig-nificance of inventory production and static facility charges. The internal direction offers many advantages, namely:
• composite market,
• the technological aptitude of the company,
• a greater degree of control over their own competitive environment,
• opportunities to explore economies of scale, and
• a greater ability to segregate the products.
However, the trade-off needs to be fully contemplated; benefits of outsourcing include the following:
• permitting the release of resources,
• decreasing the overall operating costs,
• improving the overall capability levels, and
• permitting the organisation to concentrate upon its fundamental responsibilities.
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