Between high market volatility and increased customer demand, today’s manufacturers are finding it increasingly challenging to keep up. While many companies know that adaptability is key in staying competitive in this rapidly-changing world, attaining this goal can be more difficult than it should be.
That is why many manufacturers are turning to agile processes. Between customer-focused product design, increased communication between teams, and connected technologies, agile project management can improve quality resolution lead time by 50 percent, while also optimizing product modification lead time and production ramp-up time.
Let’s examine a few of the reasons behind the fact that the agile methodology isn’t just for software development anymore.
Agile in Manufacturing Starts with Lean Manufacturing
Before agile manufacturing, there was lean manufacturing.
The concept comes from the 1930 operating model “The Toyota Way” from automobile manufacturer Toyota. Initially referred to as the “Just In Time” method, it has been suggested that Japan adopted this manufacturing methodology to solve a lack of standardization.
In 1988, John Krafcik coined the term “Lean;” the concept was further refined in 1996 by James Womack and Daniel Jones. They implemented five principles:
- Precisely specify value by specific product
- Identify the value stream for each product
- Make value flow without interruptions
- Let customer pull value from the producer
- Pursue perfection
Agile Manufacturing in Supply Chain Management
Today, lean manufacturers focus on eliminating waste as much as possible by cutting all costs not directly related to the production of a product.
Yet, one of the challenges inherent in lean manufacturing involves the supply chain. While lean manufacturing typically supports an increase in efficiency, because plants will only receive goods as needed for the production process, the process can be disrupted by delays in the supply chain. At the same time, the process may add added stress to employees, who now have to deal with inflexible working conditions. Therefore, a successful application of lean manufacturing principles requires a company to have regular outputs, high-quality processes, and reliable suppliers.
Therefore, one of the core tenets of an agile manufacturing mindset involves making sure that information throughout the entire supply chain is connected. This way, consumer demands and expectations are clear to suppliers, retailers, and the production factory. When the process is running smoothly, a company’s supply chain can align with customer demands and adjust its production plan and schedule to deliver on behalf of those demands.
Applying Agile to the Manufacturing Industry
One of the biggest issues found in manufacturing processes are costly lead times, which vary between support functions and core manufacturing processes. At the same time, siloed functions can slow handoffs between functions, like quality and engineering. This lack of communication can increase the lead time needed to solve issues like customer complaints and process quality, which can frustrate buyers and even damage the company’s reputation.
Agile, with its focus on process and communication, can help address these issues. When it comes to agile manufacturing, there are four key elements:
- Modular Product Design that enables products to serve as platforms for fast and easy variation.
- Information Technology that automates the fast distribution of information throughout the company so it can quickly respond to orders.
- Corporate Partners that enable improved time-to-market for selected product segments.
- Employee Training that creates a culture of rapid change and ongoing adaptation.
Common Manufacturing Scenarios Boosted by Agile
As mentioned above, agile brings the most value to scenarios that typically suffer from lengthy, costly lead times and where streamlined communication between production and support functions either does not exist or is hard to come by.
By enabling production and support functions to better enable teams, the agile approach assists companies with quickly solving issues that require customized solutions and delivering results faster.
The following scenarios benefit the most from agile manufacturing:
1. Addressing Customer Complaints: For most companies, customer complaints are handled by a regional customer service department, which then batches complaints together and then sends them to quality control. Quality control, supply chain, procurement, and production all then play a part in investigating the issue, which can take months due to this fragmented process. At the same time, each function has its own priorities and sets its own schedule for implementation.
This means there is no overall ownership of any necessary corrective actions that need to occur, further bogging down the process. Compare this approach to an agile manufacturing organization, which sets a clear objective to reduce recalls and complaints by a particular percentage. Agile production units made up of sales reps and quality, procurement, supply chain, and production experts are assigned responsibility for each major product or product family.
The team follows a systematic process that categorizes all major recalls and complaints and prioritizes the issues that need analysis and correction. The root causes of the problems of the most important issues are addressed and resolved, expediting a previously disjointed process.
2. Introducing New Products: Rather than following the traditional sequential process of product development, agile manufacturers deploy cross-functional teams made up of experts who specialize in new product development and delivery to market. Production experts work with the production lines and supply chain to ensure ready manufacturability with the resources available to them. The teams also communicate with regular suppliers to ensure they are able to produce the needed components at the right pace and quality level.
Further, an operational feedback loop between the agile production units and the project team helps team members make continuous improvements and changes to the product in real time. Once the product is released, it then undergoes additional, improved releases.
3. Changing Requests to Standard Products: For large-scale manufacturing companies, most customer orders are made outside of the catalogue, which often results in delays, missed deadlines, and penalties. When this process gets the agile treatment, the agile production unit works with the objective of pushing the product through the process and quickly gaining customer approval.
One person functions as the contract manager and product manager, while the team includes experts from all parts of the process, including production and the factory. When the customer requests changes, those changes are prioritized in a way that doesn’t slow or stop production.
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