Sunday, March 21, 2010

Agile Manufacturing Vs Lean Manufacturing

What is Agile manufacturing and how is it different from lean manufacturing? Agile is promoted as being the next step from lean, creating an organization that is fit and athletic; able to respond to a rapidly changing market place. Whilst lean is seen as a process by which an organization goes through a process of waste elimination to the point where it is able to efficiently produce a product time after time, but quite frankly is anorexic and unable to adapt to changes in demand.

Agile has in my mind appeared as an alternative philosophy to lean to escape from the poor perception that has blighted lean with regards to this “anorexic”, “sick” result for an organization. The typical lean implementation focuses inwardly on the organization, looking at waste elimination to the point of having a process that produces product that has minimum cost, but lacks flexibility. Thus the organization is unable to respond when there is a surge in demand or any other changes in the market place.

But is this really what lean is about? If you read the definitions of “what is lean” on the various websites of the many consultancies promoting lean, you would think so. They are on the whole selling a “quick fix”, reduction in costs program to companies, working on corporate greed to sell their services. After all, if they can reduce your costs on your main product line by 20% to 40% would you not at least listen?

These implementations often succeed in the short term, making impressive savings and improvements, but begin to revert to the old process as time passes as each subsequent problem hits and is tackled by putting back labor and reinstating old processes. Thus the perception that lean is not sustainable and quite frankly is only fit for cost saving initiatives in a mass production environment.

But this is not what lean is meant to be, the main focus of lean is not to look inwards at the companies processes to eliminate and reduce waste. Lean is about value, value as perceived by the customer. You must define what the customer values in your product and service, actual features, actual price, actual time etc. You must then look at the whole value stream from raw materials to use by the customer and try to make that value flow at the pull of the customer. Then you strive for perfection, continually improving everything that you do, continually adapting your processes using the companies greatest asset, its people.

By focusing on what is valuable to the customer you design a product and process that automatically eliminates and reduces waste. A value stream that flows requires that you remove delays and inventory. Thus reducing your costs and improving profit continually whilst remaining focused on customer needs.

If the customer requires that you are able to quickly adapt your product designs, then you design your processes to suit, if the market demands that you be able to produce product at short lead time then you design your process to be able to comply to their needs. You meet what the customer needs, is this not Agile? In my mind agile is just a rebranding of a tarnished reputation for lean that has been brought about by people trying to make quick gains without really focusing on value to the customer.

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