Agile Manufacturing Rebounds – Are You Ready?

Agile manufacturing is poised for a big comeback. Fully 50% of the 2014 Industry Week Best Plants class reported “significant” implementations of agile manufacturing across their operations, which represents a sharp uptick after a three-year decline:

• 2010 = 47%
• 2011 = 44%
• 2012 = 41%
• 2013 = 31%
• 2014 = 50%

This rebound undoubtedly reflects the need for many organizations to pivot in response to growing market volatility, but it also suggests that agile manufacturing will play a greater role in how the next generation of manufacturers define their metrics for success. Whereas Lean Manufacturing drives profitability through reduced costs, agile manufacturing drives profitability through increased sales opportunities. It would seem that organizations aiming to stay ahead of the curve need to learn not only to be more efficient, but also more nimble in their operations.

The whole idea behind agile manufacturing is to be prepared to respond as quickly as possible to sudden shifts in consumer demand and to capitalize on narrow windows of opportunity. In practical terms, this often takes the form of:

• Modular product architecture – designing products in such a way that they are comprised of standardized “building blocks” that can easily be arranged and rearranged in a variety of ways to form new products from existing ones.
• Pervasive implementation of information technology – relying upon the automation of IT to expedite production cycles and enable rapid response times.
• Virtual supply chain partnerships – forming strategic alliances with key vendors and distributors to reduce time-to-market delays for new products.
• Knowledge culture – aggressively training employees in the mining of information assets and incentivizing innovation while simultaneously placing decision-making processes closer to the “front line” of production to reduce bureaucratic delays in bringing new designs to fruition.

Organizations that structure their operations around these principles are not only better able than their competitors to deliver the novel things their customers desire. They can also more rapidly phase out under-performing products and reallocate their resources to new, more promising frontiers–which establishes them as industry leaders rather than “me too” manufacturers. Such things make a big difference in markets with fickle customers who demand instant gratification.

Agility can’t be achieved in an inefficient work environment, though. A thorough appreciation of the principles of lean manufacturing–things like production in small batches, fast changeovers, and a commitment to continuous process improvement–can help pave the way for a successful implementation of agile manufacturing. If you’re considering such a move, we can help you get off on the right foot.