Manufacturers move from Lean to agile manufacturing to adapt to dynamic global markets
Lean manufacturing is a term applied to companies that are very good at managing what is in their control, and finding ways to continuously improve areas within their shop management that prove to be inefficient. But manufacturers that have worked for years to get Lean and become Leaner may be wondering, “What’s next?”
Agility is the ability to thrive and prosper in an environment of constant and unpredictable change. Agile manufacturing deals with the things that are not readily controlled. This relatively new concept is seen as the next step after Lean in the evolution of production methodologies, but many have not yet begun to implement these new tactics. In fact, a recent study found that while 40 percent of respondents are engaged in Lean manufacturing, less than four percent pursued agile manufacturing.
The basic concept of agile manufacturing is developing what could best be called a nimble mindset when it comes to understanding market environments. In short, rapid changes in the market environment are not something to be feared, but should be seen as opportunities to beat the competition to the punch. Rapid changes in the market call for rapid responses. This notion of changeability is at the heart of new movements in manufacturing based on production agility.
AGILE MANUFACTURING IN THE JOB SHOP
Agile manufacturing represents a complete shift in the mindset of production industries in the 21st century; one in which there is both a greater relationship between technology and worker skills, and greater customer access to, and demands upon, the core competencies of their manufacturers/vendors.
By its denoted value, agile manufacturing implies a sense of flexibility. In today’s dynamic global marketplace, where the business variables are often unknown and changing, it is incumbent on the manufacturer to be able to respond to evolving demands at a pace that, in the past, would simply be considered unrealistic. However, the modern job shop has itself evolved to this point of accommodating increasingly shortened lead times and 90-degree engineering changes. Paperless routers facilitate computerized linkages from sales order generation to the tracking of shipments. Shop floor wireless systems account for inventory levels, automated purchasing and materials movement. Engineering schemata (particularly changes in design and construction) can be relayed directly to machine operators via graphical user interfaces as they are generated.
In other words, technology and technique have evolved in manufacturing so much so that agility could very well be considered state of the art. Agility is a result of streamlining to sharpen processes on the shop floor to hasten order fulfillment and, in doing so, maximize capacity for increased productivity.
THE ROLE OF ERP
Technology is an enabling factor in agile manufacturing. Identifying the right technology that helps the whole shop share a common database of parts and products, and production capacities and trouble spots within the supply chain, is key. Responding deftly to customer demands, materials shortages or other contingencies is crucial, considering that small initial problems are typically amplified down the line.
A first step toward becoming an agile manufacturer is developing the means by which business intelligence of the marketplace is made meaningful, and production is wholly synthesized through integration. ERP software brings all areas of the manufacturing operation into a single, real-time database where the actions of one department never happen in isolation; where all aspects of the operation are capable of responding quickly to customer demands. Particularly suited for agile manufacturing, ERP software provides the basis for rapid communications and the exchange of data, as well as the means by which responsive actions can be made quickly to ensure competitive advantage.
The manufacturer that has made the effort to instill agility through ERP has the competitive advantage when it comes to quickly transforming knowledge into new products and services for its customers.
AGILE MANUFACTURING IN THE REAL WORLD
While agile manufacturing is still a novel concept and has not yet been fully implemented across the broader spectrum of manufacturing, some early adopters are already seeing the benefits.
Humanetics, a precision metal works company based in Dallas, Tex., is an example of the sort of agile thinking taking place in manufacturing today. Not only is its workforce occupationally dimensional, the production model is one that takes advantage of the unique strengths of each of the company’s four facilities. With the acquisition of a plant in Wuxi, China, Humanetics is able to produce products for the Asian market using local labour and resource efficiencies. However, Humanetics has also found that it can create a hybrid manufacturing model by combining Chinese overhead efficiencies (initial labour and materials) in alliance with American quality standards (for finishing) to provide low-cost, high-quality finished goods for a global marketplace.
To maintain real-time connectivity between a large database of shop information, Humanetics implemented a robust ERP software system that provides the company with the capability to navigate production schedules, inventory management and cost accounting for the information flowing from all four of its geographically dispersed plants. As orders are taken, processes are planned accordingly to ensure that throughput is efficient, international movement of parts is smooth, quality is maintained and delivery is on time. Ultimately, it is its agile ERP software system that provides a sense of total flexibility to what Humanetics does as a multi-location manufacturer.
AGILE MANUFACTURING TOMORROW
In a global economy, windows of opportunity open quickly and can close just as fast. The more agile the manufacturer, the greater the rewards to be gained from being the first responder to customer needs. Expanding the customer-base through emerging and diverse markets necessitates the quick reflexes that result from the consistent improvement of business intelligence.
Innovation in the market provides the greatest growth opportunities for companies who are quickest because of their concerted efforts to be agile.
Dusty Alexander is the president of Global Shop Solutions, an ERP software provider based in The Woodlands, Tex.