The reduction of wasteful variation within the supp ly chain is naturally suited to high and stable volumes, as epitomised in the lean practices of the automotive industry. However, with the growth of innovative pr od...The reduction of wasteful variation within the supp ly chain is naturally suited to high and stable volumes, as epitomised in the lean practices of the automotive industry. However, with the growth of innovative pr oducts, typically characterised by lower volumes and uncertain demand, it is als o important to develop strategies to effectively manage the externally imposed v ariation resulting from volatile market demand. Such strategies often come under the banner of quick response or agile supply. System variation is the common denominator, for whereas lean strategies emphasis e the need for stability and the reduction of wasteful supply chain variation, a gile emphasises the need to respond to externally imposed demand variation. Simi larly, lean supply is closely associated with level scheduling and investing in inventory to decouple demand variation from the supply chain, whereas, agile sup ply is associated with investing in responsive capacity as inventory requirement s cannot be effectively predicted. This distinction between lean and agile supply, highlights a trade-off between investing in responsive capacity and decoupling inventory, which is closely related to the conflicting manufacturing tasks of fast response and low cost. The implications of this conflict have been more widely felt in recent years, as companies have opted to outsource manufacture to low cost overseas suppliers. T he rationale is to reduce manufacturing costs, but the trade-off is a dramatic loss of responsive capacity with higher dependency on decoupling inventory. As with lean and agile supply, the trade-off implications of such choices need to be acknowledged, conceptually understood and then separate out or otherwise r esolved. This paper introduces the business need before exploring the significance of var iation and the concept of managing variation in a delivery system using responsi ve capacity and decoupling inventory. These concepts will then be used to unpack the lean and agile paradigms before applying the thinking to a more detailed in dustrial case concerning offshore supply decisions. The paper concludes with som e reflections.展开更多
文摘The reduction of wasteful variation within the supp ly chain is naturally suited to high and stable volumes, as epitomised in the lean practices of the automotive industry. However, with the growth of innovative pr oducts, typically characterised by lower volumes and uncertain demand, it is als o important to develop strategies to effectively manage the externally imposed v ariation resulting from volatile market demand. Such strategies often come under the banner of quick response or agile supply. System variation is the common denominator, for whereas lean strategies emphasis e the need for stability and the reduction of wasteful supply chain variation, a gile emphasises the need to respond to externally imposed demand variation. Simi larly, lean supply is closely associated with level scheduling and investing in inventory to decouple demand variation from the supply chain, whereas, agile sup ply is associated with investing in responsive capacity as inventory requirement s cannot be effectively predicted. This distinction between lean and agile supply, highlights a trade-off between investing in responsive capacity and decoupling inventory, which is closely related to the conflicting manufacturing tasks of fast response and low cost. The implications of this conflict have been more widely felt in recent years, as companies have opted to outsource manufacture to low cost overseas suppliers. T he rationale is to reduce manufacturing costs, but the trade-off is a dramatic loss of responsive capacity with higher dependency on decoupling inventory. As with lean and agile supply, the trade-off implications of such choices need to be acknowledged, conceptually understood and then separate out or otherwise r esolved. This paper introduces the business need before exploring the significance of var iation and the concept of managing variation in a delivery system using responsi ve capacity and decoupling inventory. These concepts will then be used to unpack the lean and agile paradigms before applying the thinking to a more detailed in dustrial case concerning offshore supply decisions. The paper concludes with som e reflections.
