What Do Lean and Agile Have in Common?
Both lean and agile are terms which refer to modern advancements in the way work is done, which have led to reduced cost, faster response times, and better customer services for many companies in different industries.
Although both ‘lean’ and ‘agile’ refer to two separate concepts, the two do share certain similarities, and each have their own distinct advantages and disadvantages.
Deciding whether to utilize lean, agile, or both methods for your organization is an important first step for any new manufacturing start-up.
Lean Manufacturing Methods
Running a lean manufacturing business puts the most priority on the flow of material through the entire process (value stream), which keeps the costs at a minimum. When working properly, Lean methods maintain very little inventory, so the company can minimize how much money that spend on raw materials, in-progress work, and finished products at any given time.
Organizations using lean methodology use efficient purchasing and delivery systems to minimize cost by requesting inputs only when they are needed, and deliver the finished product as soon as it is ordered and needed by the customer. In addition, lean manufacturers tend to focus their core processes on main competencies, while also outsourcing a variety of productive activities to suppliers who can do it better and have more expertise. When these suppliers are treated like partners, this creates further cost efficiencies.
For example, a lean manufacturing business may outsource certain components or items that are not part of their core skills, allowing them to focus on and invest more solely in what made them successful in the first place. The suppliers deliver the items just-in-time (JIT), only when the company needs it.
Additionally, the concepts of waste reduction, employee engagement and continuous quality improvement are vital factors in lean manufacturing.
Agile Manufacturing Methods
On the other hand, agile manufacturing businesses are less focused on keeping costs low, and more focused on shifting to be able to meet changing customer demands as quickly as possible. When it comes to processes, agile companies are setup in ways that are flexible enough to be rapidly changed as the customer’s needs change. Existing equipment, labor, tools and raw materials are used in agile manufacturing, enabling teams to create new or custom products on demand, which is much faster than their competitors, which becomes a competitive advantage.
For example, a car manufacturing company using lean methods will allow the ability to use existing infrastructure to build new car models without having to make a significant financial investment. Vigorous data systems are relied on by agile marketing, production and design departments; this enables them to provide updated, current information on available resources at any given time.
Both lean and agile manufacturing methods share the same ultimate focus; increasing the sustainability of business within the sector of high-cost marketing. Both provide solutions to the challenges faced by manufacturers of the past, along with providing an opportunity for smaller manufacturing companies to compete with their larger competitors.
Both lean and agile concepts consist of a heavy reliance on statistics; both use computerized information systems and encourage open communication between teams, customers, and both internal and external stakeholders. Due to this, both concepts tie in well with modern advances in production technology; they’re perfectly matched to resources and tools available to today’s manufacturing managers.
Additionally, both lean and agile methods are decisions that should be made during the early planning stages of a company; they are designed to influence the ways in which businesses are structured not just in work sites and factories, but throughout every department of the organization from accountancy to marketing and customer services.
Shared Benefits of Lean and Agile
Benefits can be reaped from using both lean and agile processes; the two methodologies combined can strengthen said benefits even further. Lean manufacturing is used to improve cash flow and increase the amount of cash available to a business by efficiently cutting expenses, whilst agile manufacturing methods serve to increase company revenue by ensuring all terms are ready to fulfill any unexpected customer demand.
Additionally, both lean and agile concepts focus heavily on competitiveness; a priority concern in the global markets where manufacturers compete. Agile manufacturing allows a company of any size to successfully increase their number of total sales, whilst lean methods give businesses the freedom and flexibility to attract new custom via product price promotions and reductions
Why Do They Work Well Together?
Whilst lean and agile methods of manufacturing are two distinct things, they do work well together. Whilst lean manufacturing allows for costs to be reduced, agile methods allow companies to boost their reputation by being able to meet even the most challenging of sudden customer demands.
Combine the two together, and you have the perfect recipe for manufacturing business success. Whilst lean methods allow the company to save on costs, agile manufacturing can be used to ensure that products are gotten right the first time. For example, ‘beta testing’, where customers are given the smallest useful part of a product and asked to report what works well and what does not, is a useful Agile method.
Additionally, lean methods can enhance agile strategies for managing team productivity. Within a lean manufacturing system, work is broken down into a set of value streams that demand signals trigger. Using this strategy, the output of one value stream will lead to more. Since agile is largely based on connecting the work of multiple teams, this method comes in useful for achieving efficiency and communication.
Both lean and agile manufacturing methodologies are popular options for reducing business cost, improving the ability to meet customer demands and enabling heightened competitiveness. They can each be used alone, however, when used together result in further benefits; both agile and lean strategies tend to enhance one another.