• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • CommentGo Back
 
1
1
The Agile Enterprise
Adi Choudri 
1.1INTRODUCTION
An agile enterprise is adept at reorganizing its people, management, physical facil-ities, and operating philosophy very quickly to produce highly customized productsand services to satisfy a new customer or a new market. Agility is the deliberate,strategic response for survival in today’s market conditions.A company that knows how to be agile:
•
Strategizes
to fragment mass markets into niche markets
•
Competes
on the basis of customer-perceived value
•
Produces
multiple products and services in market-determined quantities
•
Designs
solutions interactively with customers
•
Organizes
for pro
fi
ciency at change and rapid response
•
Manages
through leadership, motivation, support, and trust
•
Exploits
information and communication technologies to the fullest
•
Leverages
all its capabilities, resources, and assets regardless of location
•
Works
through entrepreneurial and empowered teams
•
Partners
with other companies as a strategy of choice, not of last resort
•
Thrives
and is widely
imitated
As we transition into the 21st century, radical changes are taking place that arereshaping every aspect of a business, including the way we produce goods andservices. With the advent of Internet and high-speed communication, the marketplacehas truly become global and fragmented. Customers are requiring smaller quantitiesand more customized products quickly. Traditional manufacturing, with its largebatch approach, extensive inventories, and static organizational style, simply cannotcompete in this marketplace. The notion of 
“
economies of scale
”
becomes almostobsolete in such a changing and fragmented market. In the 1980s and
’
90s we learnedlean manufacturing techniques, reduced cycle time and cost, and strived to becomeworld-class. We introduced just-in-time (JIT) techniques such as one-piece part
fl
owand quick changeover, and practiced team-based continuous improvement. Yet ourcustomers pressed for even more
fl
exibility, shorter lead times, and more variedproducts and services. Lean manufacturing is about being very good at doing thingswe can control. Agility of an enterprise gives the ability to deal with things it cannotcontrol. Agility means not only accommodating change but also relishing the oppor-tunities inherent within a turbulent environment.Here are some of the axioms of agile manufacturing: Mass production is mori-bund. Mass customization requires that each customer be treated as an individual.
© 2002 by CRC Press LLC
 
2
The Manufacturing Handbook of Best Practices
This leads to a people-intensive, relationship-driven operation. Increasingly, a com-pany ceases to sell products but rather sells its ability to ful
fi
ll customers
’
needs,utilizing its information and people skills. New information technology such as theability to leverage the Internet and a highly educated, skilled workforce becomesthe real asset base for the corporation. This allows local decision-making by peoplewho understand the company
’
s vision, principles, customer requirements, and prod-ucts and services. They must know how to create cooperative alliances across thesupply chain, how to recon
fi
gure products and production facilities, and how tocombine expertise to satisfy the changing marketplace. Agile companies put enor-mous emphasis on training and developing their people. For example, Saturn Cor-poration requires their employees to take no less than 96 hours of training everyyear. The latest information technology such as Internet and object-oriented pro-gramming can provide a tremendous amount of information and computer system
fl
exibility in the hands of a highly trained workforce. Forming virtual teams withinthe supply chain (sometimes even with a competitor) to satisfy a customer needbecomes commonplace with agile enterprises. Internet and information technologybecome key enablers.Many industries and markets are increasingly requiring much greater
fl
exibilityand timeliness from their manufacturers and service providers. These changes aretaking place very fast in some industries and more slowly in others. But the com-panies that will meet the challenges of the ever-changing global marketplace of the21st century must go beyond lean and become agile in every aspect of their business.Agility is not a magic wand to solve all ills. But without agility, survivability in the21st century will be questionable for many corporations. However, agility must bebuilt on the
fi
rm foundation of world-class or lean manufacturing methods and high-quality Six Sigma processes, coupled with an organization that is physically, tech-nologically, and managerially and culturally
fl
exible enough to capitalize on rapidand unpredictable change.
1.2TRADITIONAL MANUFACTURING
Why does traditional batch-and-queue manufacturing seem right intuitively, yet carryso much waste? We human beings are into a mental world of 
“
functions
”
and
“
departments
”
and have a commonsense conviction that activities ought to begrouped by type so they can be performed more ef 
fi
ciently and managed more easily.Intuitively, this makes sense if the activity contains some form of 
“
set-up
”
activity.For example, making numerous trips to the supermarket to get groceries one itemat a time would be tremendously wasteful, and our intuition would be right in thiscase. So it is natural for us to take this intuitive sense of ef 
fi
ciency and extend it toan enterprise where processes are not independent, and we start thinking that to gettasks done more ef 
fi
ciently within departments we must perform like activities inbatches. In the paint department we tend to paint all the cars green and then shiftto red, then to white, in between creating as large a batch size as possible regardlessof the need. Batches, it turns out, always mean long delays as the product sitspatiently awaiting the department
’
s changeover to the type of activity the product
© 2002 by CRC Press LLC
 
The Agile Enterprise
3
needs next. But this approach keeps the department and its people and equipmentbusy and gives a sense of 
“
ef 
fi
ciency
”
because everyone and everything is workinghard. This comes from our lack of 
“
systems
”
thinking that is actually counter-intuitive. We must see this from the perspective of the part
fl
owing through thesystem rather than the viewpoint of the individual process. Taiichi Ohno, the fatherof the Toyota production system, blamed this batch-and-queue mode of thinking oncivilization
’
s
fi
rst farmers, who he claimed lost the one-thing-at-a-time wisdom of the hunter as they became obsessed with batches (once-a-year harvest) and inventory(the grain depository). Or perhaps we are simply born with batch thinking in ourheads, along with many other commonsense illusions. For example, time seemsconstant rather than relative or the sun seems to revolve around Earth and not theother way around. But we all need to
fi
ght departmentalized batch thinking becausetasks can almost always be accomplished more ef 
fi
ciently and accurately when theproduct is worked continuously from raw materials to
fi
nished goods. In short, thingswork better when you focus on the product and its needs rather than the organization,the equipment, or the people, so that all the activities needed to design, manufacture,and ship a product occur in a continuous
fl
ow.Henry Ford and his associates were the
fi
rst people to fully realize the bene
fi
tof 
fl
ow thinking. Ford reduced the amount of effort required to assemble a ModelT Ford by 90% during the fall of 1913 by switching to continuous
fl
ow in
fi
nalassembly. Subsequently, he lined up all the machines needed to produce the partsfor the Model T in the correct sequence and tried to achieve
fl
ow all the way fromraw materials to shipment of the
fi
nished car, achieving a similar productivity leap.But he discovered only the special case. His method worked only when productionvolumes were high enough to justify high-speed assembly lines, when every productused exactly the same parts and when the same model was produced for many years.After World War II, Taiichi Ohno and his technical collaborators, includingShigeo Shingo, concluded that the real challenge was to create continuous
fl
ow insmall-lot production, when dozens or hundreds of copies of a product were needed
—
not millions. They achieved continuous
fl
ow by learning to quickly change overtools from one product to the next and by rightsizing the machines so that processingsteps of different types could be conducted immediately adjacent to each other withthe product being kept in continuous
fl
ow. These concepts led to what is now knownas lean manufacturing.
1.3EVOLUTION FROM LEAN TO AGILE ENTERPRISE
When change is discontinuous, the success stories of yesterday have little relevanceto the problems of tomorrow; they might even be damaging. The world at every levelhas to be reinvented to some extent.Charles Handy,
 Beyond Certainty,
Arrow Business Books, 1996
As we approached the new millennium, companies started to build upon those improve-ments gained through application of lean manufacturing principles.
© 2002 by CRC Press LLC
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
You must be to leave a comment.
Submit
Characters: ...