Lean vs Agile: Which supply chain strategy should your business pursue?

A lean supply chain is essentially a supply chain which produces how much is required, when it is required and where it is required. It eliminates any form of non-value added activity to ensure maximum efficiencies across the supply chain. As a concept it has developed since the introduction of Fredrick Wilson Taylor’s book The Principles of Scientific Management (1911). In more modern times, Lean has become the de facto standard for industries looking to eliminate waste and maximise efficiencies.

Globalisation is something which has had a major impact on the core principles of Lean. Rapidly changing customer demand means that customers increasingly want products which meet their ever shifting requirements.  As a result, efficiency is becoming an increasingly difficult measure of the supply chain as businesses strive towards an agile supply chain strategy which induces velocity and flexibility. The nature of flexibility is that a business may have additional capacity to cope with the changing demands of the customer. Consequently, businesses will create waste through additional capacity in anticipation of changing consumer demands.

The use of appropriate planning and forecasting is increasingly integral to all of this. Through visibility of forecast sales, supply chains can build strategies, which react to customer demand whilst remaining efficient to operations through the management of operating capacity. Whether it is appropriate to target full blown sales & operations planning principles that seek to harmonise the demand side of the equation with the supply components open to the organisation, or whether a more straight-forward improvement in a single supply planning approach is what is called for will vary by company.

At The Logistics Business we believe that the devil is in the detail and the detail is increasingly about data and utilising disparate sources of data to forecast better and make swifter and more informed decision that benefit the organisation holistically. It is possible to have your cake and eat it by having a lean supply chain that is also agile enough to respond to customer demand changes, but first you must ensure that you have the right resources in place to support your decision-making. To find out more contact us on 01527 889060 or email info@logistics.co.uk.