What is Agile Manufacturing?
Agile Manufacturing is a production methodology that enables companies to be agile in the face of change. As customer expectations shift and opportunities for innovations arise, Agile manufacturers are able to shift their strategies quickly and responsively.
The consumer and industrial markets change quickly and very often. Regardless of the product or the operation, manufacturers that do not meet market demand will be left behind by competitors that can give consumers what they want, when they want it.
Let’s explore Agile Manufacturing, what it does, how it accomplishes certain goals, and if it is the right practice for you.
KEY TAKEAWAYS
- Agile Manufacturing is a methodology whereby companies adopt tools and methodologies that enable them to be more responsive to the market.
- Key elements of Agile Manufacturing are Customer Focus, Modular-Product Design, Information Technology, and Inter/Intra Company Involvement.
- Businesses stand to benefit from quick production times with new and innovative products to the market.
- Customers stand to gain greater customization and personalization of products.
4 Key Elements of Agile Manufacturing
Agile Manufacturing is all about turning speed and agility into a key competitive advantage.
1. Customer Focus
The customer is paramount within Agile Manufacturing. While pursuing market flexibility and optimizing operational efficiency is good, if the customer is unwilling to pay for the product, then your agile methods have failed.
2. Modular Product Design
Instead of looking at one product as a whole, agile manufacturers will produce their products with a modular design. Each product is made up of various parts and processes which can be quickly changed or varied based on the needs of the market.
3. Information Technology
Knowledge is power. And the more your employees and systems have access to this knowledge, the faster and more agile your company will be to sudden shifts in the market. With greater transparency and visibility, companies are pursuing greater responsiveness to their customers.
4. Inter & Intra-Company Involvement
Within Agile Manufacturing, every department and every partner needs to be connected. From marketing, design, production, and distribution, the whole company needs to be tapped into a database that gives them access to information on materials, production capacity, delivery times, and potential issues.
Why Use Agile Manufacturing?
With the growth of e-commerce year over year, consumers are more demanding than ever. And their tastes and preferences are constantly evolving from month to month and even day to day. With all that Agile Methodology has to offer the industry, it is especially useful for companies with the 2 following characteristics.
- Companies within countries where labor costs are above the global average.
For these types of companies, competing with offshore prices is not a viable option. But what they do have is greater control over their workforce, providing them with flexibility and resiliency to market shifts.
- Companies that are geographically close to their indented market.
If close to the intended market, companies have greater control over their production and distribution. This leads to a more agile operation that also experiences shorter lead times.
Customer Benefits of Agile Manufacturing
Agile companies leverage their operation and methodology to provide a more responsive relationship with their customers and their needs. Progressively, consumers are getting used to 3 major factors while purchasing.
- Fast and Responsive Delivery: Consumers love getting their packages as soon as possible. As we have seen with Amazon Prime, users are willing to pay monthly fees just to get their products quicker. If manufacturers are geographically close to their customers, then the business can deliver their product that much sooner, leading to greater customer satisfaction.
- Product Personalization: 100 years ago, when buying a blender, it came in only one size, one speed, and one color. Now, no matter what kitchen appliance, most major brands will have a variety of options to choose from. This enables customers to have a greater degree of personalization from their purchases. Agile practices enable companies to provide a varied line of products that customers can choose from without wasting time, money, or materials.
- Product Innovation: Agile practices enable companies to be responsive to consumer demand and get innovations out on the market sooner. As soon as needs arise within the market, an agile company will be able to augment their product and their operation to meet those new needs.
If a company is not sufficiently agile, they will struggle to keep up with the ever-changing demands and growing expectations of the market.
Agile Manufacturing vs. Lean Manufacturing
Lean and Agile can be understood as a person being lean and/or athletic. Often, companies will become Lean before they become athletic or Agile. They will first focus on cutting out waste and this enables them, in part, to pursue a more Agile methodology. Though, it should be stated that companies can be Agile and responsive to market demands while still producing a lot of waste.
The main difference between the two is that Lean production methods focus on optimizing production whereas Agile Manufacturing focuses on optimizing customization, variety, and product evolution. This is an incredible methodology for mixed-model. As customers want newer and better products more quickly, an Agile company can fulfill these demands sooner.
What’s Your COC Time?
When looking at whether your company should adopt lean practices, agile practices, or both, companies need to take a look at their COC (customer order cycle). If your COC is fairly short and products are completed soon after the order has been made, then you have a lot of opportunities to change production based on the changing market.
Conversely, if your business is characterized by longer COC times, like aircraft manufacturers that gain specific contracts that last years, you may not be able to reap all the benefits that Agile Manufacturing has to offer.
At the end of the day, within Lean and Agile methodologies, one is not greater than the other. It all depends on your production.
Is Agile Manufacturing Right for You?
As consumers’ expectations progressively move towards more choice, faster delivery, and frequent innovation, Agile Manufacturing is the right solution for companies looking to gain a competitive edge, especially over offshore companies. If your company is close to the intended market and has short COC times, then you will be able to optimally reap the benefits of Agile methodologies.
