A key characteristic of an agile supply chain is flexibility. Agility is the ability of an organisation to respond rapidly to changes in demand both in terms of volume and variety. To be agile a supply chain must be able to read and respond to demand. This requires the organisation to move from a forecast driven environment where inventory is pushed through the supply chain to an order driven environment where inventory is pulled through the supply chain.
A lean supply chain would benefit an environment where there are high volumes and predictable demand. An agile supply chain would benefit an environment where there is a wider range or variety of items in smaller volumes.
Applying A Lean Supply Chain, Agile or Leagile
From a procurement perspective the application of lean, agile or leagile creates a number of strategic and tactical decisions to ensure that the approach is viable. These range from the overall strategic objective of the procurement and supply function, through types of relationship actions, to the supporting philosophy behind the approach. In an environment of low variety and low volume the procurement and supply function must ensure that the flow of product and information is provided by a robust supply chain. In an environment that consists of high variety and low volume the emphasis for the procurement and supply function is to ensure it can satisfy demand in an agile manner. In an environment where there is high volume it will be necessary to reduce waste and reduce costs to develop a lean supply chain.
To achieve this the procurement function would implement Early Buyer
Involvement to ensure their expertise is used on a consultancy basis to advise the organisation on the best way to reduce waste. Involvement bringing together the expertise of buyers, suppliers and other stakeholders to achieve a lean and agile environment. If you want to find out about developing a lean, agile or leagile supply chain, you may be interested in a CIPS Diploma in Procurement and Supply.
Thankyou!
Trisha Dhawe
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