During a recent meeting of our monthly Business Improvement Group one member, who coordinates a peer-group for some of our area’s largest manufacturers, commented that several of these companies expressed deep concern over the volatile swings in demand they were seeing these days, so variable that many thought they could not long take the pressure of such extremes. Welcome to the new normal, right?
The next day, I ran across an article in APICS magazine (The Association for Operations Management) that cast a light on the future of manufacturing and seemed to nip at the heels of the problem these owners were lamenting. Manufacturers have to go beyond just being “flexible” –i.e., having quick responses in range and time to external or internal changes — and move toward “agile” – in a hurry.
The APICS article noted how we have evolved from the “mass production” model of 1900, which defined all of manufacturing, to today where we’re at 50% “mass production,” 40% “flexible” and about 10% “agile.” Furthermore, the trend, according to the article’s author, (Richard E. Crandall, Ph.D., DFPIM, CIRM, CSCP) was headed toward 20-50-30% (mass-flexible-agile) in the not too distant future.
While the difference between agile and flexible is a bit vague, the APICS Dictionary (long considered the dictionary of manufacturing terminology) defines agile as “the ability to successfully manufacture and market a broad range of low-cost, high-quality products and services with short lead times and varying volumes that provide enhanced value to customers through customization.”
Here, I think, is the issue: The “flexible” manufacturer is largely an internal consideration. How quickly can we design changeover, modify volumes, reroute, and so on. “Agile” manufacturers are forced to look beyond their companies’ borders. The Iacocca Institute coined the term “agile” (good overview here) and states that “agility is necessary to respond to the emerging competitive environment. Acquiring that agility requires the integration of flexible technologies with a highly skilled, knowledgeable, motivated and empowered workforce and… structures that stimulate cooperation both within and between firms.” [my italics]
It’s a prescription for increased supply chain integration among and between companies, suppliers, vendors, customers. Today’s flexible manufacturer needs to become tomorrow’s agile manufacturer. And technology and the Internet will be the leading conduit for those changes. In other words, it’s in the software.
But then, agile manufacturers have already figured that out.