Rachel Mason-Jones

Lean, agile or leagile? Matching your supply chain to the marketplace

Many enterprises have pursued the lean thinking paradigm to improve the efficiency of their business processes. More recently, the agile manufacturing paradigm has been highlighted as an alternative to, and possibly an improvement on, leanness. In pursuing such arguments in isolation, the power of each paradigm may be lost, which is basically that agile manufacturing is adopted where demand is volatile, and lean manufacturing adopted where there is a stable demand. However, in some situations it is advisable to utilize a different paradigm on either side of the material flow de-coupling point to enable a total supply chain strategy. This approach we have termed the Leagile Paradigm. This paper therefore considers the effect of the marketplace environment on strategy selection to ensure optimal supply chain performance. Real-world case studies in the mechanical precision products, carpet making, and electronic products market sectors demonstrate the new approach to matching supply chain design to the actual needs of the marketplace.

Information enrichment: designing the supply chain for competitive advantage

Speed of response to customer demand has long been recognized as a key attribute to business success since customer loyalty can be won or lost on product availability. With everyone implementing lean manufacturing philosophies, companies additionally need to become smart chain managers and ensure continuous improvement to stay competitive. Exploits further the concept of the “seamless supply chain”, by encouraging market place information to move through the supply chain with as little distortion as possible. The simulation model used to benchmark performance improvement is representative of both the MIT beer game and much experimental industrial practice. It is therefore realistic as an aid to the implementation of decision support systems (DSS). Presents the beneficial dynamic effects of enriching each supply chain member’s order decision with undistorted market sales. Concludes that tremendous benefits can result from adopting a holistic approach if the attitudinal problems associated with information sharing can be overcome.

Total cycle time compression and the agile supply chain

Abstract Agility is herein interpreted as using market knowledge and a virtual corporation to exploit profitable opportunities in a volatile market place. This requires the slashing of process lead times throughout the chain. However, as we demonstrate in the paper such action is simply not enough to enable agility. Similar steps must also be taken to reduce information lead times, resulting in the concept of the “information enriched” supply chain. Simulation results obtained on realistic models of fashion trade supply chains confirm the superior agility resulting from information enrichment. The paper concludes with a Route-Map indicating the steps to be taken in achieving supply chain agility in real world scenarios.

Using the Information Decoupling Point to Improve Supply Chain Performance

Traditionally, the decoupling point methodology has been associated with the material flow pipeline. However, to maximize improvement in supply chain dynamics, information flow is equally important. Many of the problems exhibited in the material flow pipeline are the result of the distortion of marketplace sales information as it is transferred upstream through the supply chain. This research expands on the traditional material decoupling point methodology and establishes the role of an information decoupling point within the supply chain. The authors demonstrate the business opportunities generated by first recognizing the existence of the supply chain information decoupling point and then learning how to utilize it to gain strategic advantage. In order to make sensible planning and delivery decisions, a business must be able to separate out contingency from real orders as they move upstream from the marketplace. It is the basis for supply chains moving towards continuous flow and away from point‐to‐point movements and ultimately, where appropriate, to holistic control.

Information flow in automotive supply chains - identifying and learning to overcome barriers to change

Improving competitive advantage to the first‐tier echelon of automotive supply chains is enabled via the requirement for transparent information flows in both the order‐generating and order fulfilment channels. However, four generic areas are identified which are barriers to improving performance. These are cultural (is it in our interests?); organisational (does the supply chain have the right structure?); technological (what common format and standards are required?); and financial (who pays the bill?). How these barriers may be overcome to the benefit of all “players” in the chain is discussed, plus benchmarking of current best practice. Exemplar supply chains are identified as noteworthy for the emergence of supply chain “product champions”. These have the vision, authority, and drive to implement new systems and set in place mechanisms to minimise regression to old working practices.

Information flow in automotive supply chains – present industrial practice

The automotive industry acts as a barometer and flagship of the national economy. First tier suppliers are essential enablers in the success of the sector. Here we identify present practices concerning information flow as perceived by typical first tier suppliers. Observations are made via “top pain analysis” facing an individual supplier and “quick scan analysis” on a range of automotive value streams. Major information flow weaknesses encountered in real‐world value streams are highlighted. To conclude, we show the “well‐trodden path” established for performance improvement as enabled in real‐world supply chains.

Time compression in the supply chain: information management is the vital ingredient

Our total cycle time (TCT) compression strategy encompasses the whole system in the supply chain from consumer demand to customer satisfaction. TCT has two major components that are essential to meeting customer demand: information flow and material flow. Both are necessities and together make up the total supply chain lead‐time; the information activates the material pipeline. Therefore to optimise a time compression strategy TCT must include both the information and material flows. We show in the paper that a very effective way of achieving TCT is via access to EPoS data by all “players” in the supply chain. The tremendous benefits exhibited by TCT compression within the supply chain can be described as “squaring the dynamic response circle”. Not only are the stock dynamic responses improved via time compression, but the capacity dynamics are also radically improved. Therefore TCT compression avoids the dilemma frequently faced by companies when implementing change of having to trade off customer service level against capacity utilisation. Our results are verified using a simulation model of a common real‐world supply chain.

The Impact of Pipeline Control on Supply Chain Dynamics

The use of pipeline feedback to ensure good control of material flow systems has been developed over the years on a pragmatic basis. More recently, the mechanism by which the improved control is achieved has been the subject of theoretical analysis. In turn, this has led to recommendations for good parameter settings which may be used with confidence when applied to a particular generic decision support system (DDS) known as the “to make” model. One consequence of utilizing pipeline feedback is the enhanced damping capability of this system. In our experience, many supply chains may be represented by the coupling together of a series of To‐Make models. In this paper, we show that the use of supply chain feedback within each echelon greatly reduces the order amplification as it proceeds upstream from the market place. Using as an example a model of the Beer Game Supply chain, it is concluded that demand amplification is readily reduced by a factor of 2:1.

The BPR SCOPE concept in leveraging improved supply chain performance

There are three possible outcomes following the undertaking of BPR projects. First, a BPR programme may fail in the short or long term either because it is improperly implemented or because there is no effective follow‐up. Second, a BPR programme may be deemed satisfactory in outcome yet still does not appear to significantly improve bottom‐line performance. Finally, there is the BPR programme which is highly successful and significantly improves the bottom‐line performance. It is identifying the last category which is the subject of this paper. In our view, to maximise the probability of making a major impact on the supply chain bottom line, BPR programmes should be planned to have adequate SCOPE. This is a three‐dimensional model of the change process with breadth, depth and width axes. Our approach to evaluating BPR impact is illustrated by application to the product delivery process of an electronics products supply chain. The prediction of improved performance is demonstrated via a dynamic simulation model of a real‐world supply chain as a function of the particular implementation phase of the BPR programme. The eventual improvement in performance obtained after a number of years progress is very significant. Indeed, in material flow terms, it is now a structurally much improved, robust and internationally competitive supply chain.

Coping with Uncertainty: Reducing “Bullwhip” Behaviour in Global Supply Chains

All supply chains suffer the effects of uncertainty. One of the most documented (and painful) symptoms is upstream order magnification known as the “Bullwhip Effect”. We believe that companies which cope best with uncertainty via an effective supply chain strategy are most likely to produce internationally competitive bottom-line performance. Although uncertainty takes many forms four key areas within a supply chain structure can represent these. These key segments are the supply side, manufacturing process, process controls and demand side. They may be combined to form the uncertainty circle. It is manifest that the uncertainty present within each of the quadrants must be reduced to maximise competitive advantage and hence market share. The paper therefore proposes a set of actions, which will reduce supply chain uncertainty caused by demand amplification (or the “bullwhip effect”) irrespective of source. The methodology is shown to apply to a wide range of realworld supply chains.