Lean & Agile

• Lean


  First adopted by manufacturer Toyota in Japan
• Lean supply chain


  • Allows the flow of goods and services and technology from suppliers to consumers without waste
• Key principles of lean operations


  • Streamlining processes to eliminate waste, making operations more efficient, reliable and cost effective
• Lean thinking


  1. Specify value: identify what adds value from customers perspective not just the firm's

  2. Identify the value stream: recognize every step to pinpoint any non value adding

  3. Create value flow: make sure that the steps which create value move smoothly without any interruptions

  4. Pull system: only produce what customers require

  5. Strive for perfection: continuously removing waste as identify aiming for perfect process
• Seven wastes of lean


  • Non-value added activities
• The main goal of lean is to reduce number of resource used but still generate the same outcome
• Example of non-value adding activity


  • Trucks lines up for hours at boarders because of extra checks after brexit. This long wait is a waste and it doesn't add any value
• Characteristics of lean operations


  • An orderly and clean workplace
  • Just-in-time processing driven by customers demand
  • Quick changeovers of machines
  • Minimal inventories
• Push system

  Items moved to the next stage as soon as it has been processed from the previous stage
• Pull system


  Demand-driven items moved only when the next stage needs them. It is a reactive process. Implemented using methods like just-in-time
• Just-in-time (JIT)


  Making what customers needs when it is needed and in the quantity needed using minimum resources of people, materials and machinery
• Example of JIT


  • Continental (automotive industry) only order parts when they are required by customers with the right quantity
• Characteristics of JIT


  • Low volume shipments
  • Frequent deliveries
  • Customised routes
  • Standardized containers
• Differences between push & pull systems

  • Production approximation vs Production precision
  • Anticipated use vs Actual use
  • Large inventory vs Low inventory
  • Risk of waste vs Lower waste
  • Poor communication vs Better communication
• We can eliminate waste through: matching supply with demand, pull system, FIFO/LIFO, 5S
• Agile supply chain


  Flexible and adjustable supply chain to meet the unexpected needs
• Key drivers of agility


  • Changing and unpredictable market
  • Increase technological innovations
  • Customers requirements for customization and choice
  • Shorter life cycle
• Application of agile in supply chain aim to increase the ability to understand and response to market changes and customers demand