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Chapter 7 The agile supply chain

Chapter 7 The agile supply chain. 1. 2. The concept of agility. Agile practices. Content. What are the dimensions of the agile supply chain?. 1. The concept of Agility. Key issue. The concept of Agility. Market sensitive Supply chain is capable of reading and responding to real demand

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Chapter 7 The agile supply chain

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  1. Chapter 7The agile supply chain

  2. 1. 2. The concept of agility Agile practices Content

  3. What are the dimensions of the agile supply chain? 1 The concept of Agility • Key issue

  4. The concept of Agility • Market sensitive • Supply chain is capable of reading and responding to real demand • Virtual • Information-based supply chain, rather than inventory-based. Agile supply chain

  5. The concept of Agility • Network based • EDI and internet enable partners in the supply chain to act upon the real demand • Process integration • Collaborative working between buyers and suppliers, joint product development, common systems and shared information Agile supply chain

  6. Efficiency, cost end-customers become more knowledgeable about product Lean supply chain 1980’s Focus Agile supply chain 1990’s Responsiveness The concept of Agility • Demand characteristics and supply capabilities

  7. The concept of Agility • Demand characteristics and supply capabilities

  8. The concept of Agility Comparison of characteristics of lean and agile supply

  9. The concept of Agility Source: Mason-Jones, Naylor and Towill (2000), Engineering the leagile supply chain

  10. Supply characteristics Hold inventory: hedge and deploy Plan and control Long lead time React and execute: agile capabilities Short lead time JIT: pull scheduling Demand characteristics Predictable market Unpredictable markets The concept of Agility

  11. The concept of Agility • Application of leagility: separation of ‘base’ and ‘surge’ demands

  12. Application of leagility: the Pareto curve approach Source: Martin, Christopher and Denis Towill, An integrated model for the design of agile supply chains

  13. Application of leagility: the de-coupling point approach

  14. The concept of Agility • Preconditions for successful agile practice • Enterprise-level reality check • Cost of complexity sanity check • Lowering the cost of complexity: avoiding overly expensive agility • Forecasting: reduce the need for last minutes crises • External: demand forecast • Internal: financial forecast, asset forecast

  15. 1. 2. The concept of agility Agile practices Content

  16. How can we use agile practices to benefit from turbulence in the marketplace? 1 Agile practices • Key issue

  17. Agile practices • Three characteristics of supply chain operations related to agile • Mastering and benefiting from variation in demand; • Very fast response to market opportunities; • Unique or low volume response.

  18. Demand variance Time Agile practices • Benefiting from variance • Three sources of demand uncertainty • Seasonality • Product life cycles • End-customer demand

  19. Organize Adjust Volume Agile capability is needed Start up Micro-markets variety Agile practices • Benefiting from variance • Three sources of demand uncertainty • Seasonality • Product life cycles • End-customer demand

  20. Agile practices • Benefiting from short time windows • Decreased D-time requires different levels of agility (VMI & QR) • Speed of replenishment • Upstream time sensitivity • Information dissemination and alignment

  21. Agile practices • Benefiting from small volume • Small volume is a result of micro-markets, customization and rapid responsiveness. • Three approaches of agile strategy related to small volume • Changeover flexibility • Modularity at the network level • Service-based and information-based solutions

  22. Variety decrease Mass production Flexibility Modular supply network Craft production Volume decrease Agile practices • Benefiting from small volume

  23. An integrated model for enabling the Agile supply chain

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