MEASURING MANUFACTURING SPEED IN AGILE MANUFACTURING

ENVIRONMENT-Industrial case study in Nigeria

ABSTRACT

Agile manufacturing is essentially an approach a manufacturing company takes to manufacture

products. It looks at the processes, tools and training the company is using in order to respond to

customer needs and market changes. An agile manufacturing strategy would use processes, tools
and training, which enables it to respond to these needs and changes rapidly without jeopardizing

the cost and quality of the product.

The focus of agile manufacturing lays on the response time and the aim is to react to customer

needs quickly. Therefore, agility and speed become the competitive advantages of agile

manufacturing. The processes, tools and training are often supported by a highly integrated

information technology system.

The products tend to be highly customizable and modular. The technology is used to allow

different players (marketers, designers, the production team) to share data and to use it to solve

problems that might slow down the process otherwise. The emphasis is on correcting quality

issues and implementing changes at the earliest point in the manufacturing process, as this is

considered cheaper and quicker than corrective actions later on. This requires agile

manufacturing organizations to be structured differently compared to traditional manufacturers.

These organizations tend to have flatter hierarchical structures, as employees need to react

quickly to customers’ needs. This also requires the organizations to have high levels of

communication to ensure changes are implemented swiftly.

Furthermore, agile manufacturing is prevalent in well-developed local market. Agile

manufacturers benefit from the proximity to the local market, as it can improve speed and agility.

Implementation of changes to products can be much more effective in these markets. Moreover,

being close to the customer ensures that agile manufacturers can respond to even slight changes

in customer behavior quickly.

 CHAPTER ONE

INTRODUCTION

1.1 RESEARCH CONTEXT

The purpose of agile manufacturing system (AM) is a vision of manufacturing that is a natural

development from the original concept of lean manufacturing .In lean manufacturing ,the

emphasis is on the elimination of waste .The requirement for organization and facilities to

become more flexible and responsive to customers led to the concept ,According to Gupta and

Mitta(1996)Agile manufacturing is a business concept that integrates organizations ,people and

technology into a meaningful unit by developing advance information technologies flexible

and nimble organization structures to support highly skilled, knowledgeable and motivated

people.

The word lean implies high productivity and quality but it does not necessarily imply being responsive.

Agile on the other hand ,stresses the importance of being highly responsive to meet the “total needs of the

customer ,while simultaneously striving to be lean, a manufacturer whose primary goal is to be lean

comprises responsiveness over cost –efficiencies .Agile manufacturers place equal importance on both

cost and responsiveness . This is the main reason for incorporating cost and quality into agile competitive

bases Yusuf etal, (1999),Agile manufacturing [AM] has gained increasing attention from the

manufacturing enterprises to deal with today’s hypercompetitive market environment .Given the

significant investment in manufacturing operating system ,an investigation of how agile manufacturing

operation can contribute to the industry best performance and competiveness is essential for its

justification. Agile Manufacturing can be said to be a relatively new, post –mass-production concept for

the creation and distribution of goods and services .it is the ability to thrive in a competitive environment

of continuous and unanticipated change and to respond quickly to rapidly changing markets driven by

customer-base valuing of product and services Devor and Mills( 1995).It include rapid product realization

,highly flexible manufacturing and distributed enterprise integration .They argue that technology alone

does not make an agile enterprise .Companies should find the right combination of

strategic ,culture ,business practices and technology that are necessary to make it agile taking into account

the market characteristics .by proactively establishing virtual manufacturing with an efficient product

development system to :(i) Meet the changing market requirement. (ii) Maximize customer service level

and (iii) Minimize the cost of goods,with an objective of being competitive in a global market and for an

increase chance of long –term survival and profit potential.This must be supported by flexible people,

processes ,and technologies.

1.1.1 HOW MANUFACTURING SPEED IS BEING MEASURED

The speed of your production system is a key aspect of your manufacturing system, and controlling it is

important for the success of your organization. Unfortunately, there are many different and confusing

ways to measure the manufacturing speed. Even a simple question on how to call a speed is often

confused, with many practitioners using the same term for different measurements, or different terms for

the same measurements.

There are tons of different terms used by practitioners about the speed of the line: cycle time, takt time,

process time, target cycle time, effective cycle time, line takt and many more. Unfortunately, often

different lean practitioners mean different things using the same term, or mean the same thing but use

different terms. This is not good. The line speed is one of the of the important aspects in improving your

manufacturing system. Yet, exactly at this key point of lean manufacturing, the terminology about line

speed is absolutely not standardized. However, there is a plethora of possible speed measurements out

there.
Fig 1.1 Tree of Manufacturing speed measurement options(www.allaboutlean/production speed

measurement)
Different Manufacturing Speed Measurement Options

Some are more common than others, but it definitely has a lot of potential for confusion. Let’s

have a look at the most frequently used measurements. For the sake of simplicity I use discrete

parts for my examples below, but you can easily adapt it for continuous production in process

industry, e.g. if you produce liters of beer per hour.

Different Speed Measurements

The takt time

Fig 1.2 Giving the takt….(www.allaboutlean.com)

The takt time is probably most well known for the customer takt. The customer takt is the

available work time divided by the customer demand during this time.

Please keep in mind that this is of course an average time between customer orders. In reality,

the customer will order much more erratically. we can also calculate the takt for a single process

or an entire manufacturing system. It is important that this always includes the losses! This is

useful if we want to find out if the system is able to satisfy demand.

We should also distinguish between the target value and the actual value. For example, if to

determine that the system has produced 6000 parts during the last week with 40 working hours,

the system or line takt is 24 . If, however, you would have needed 7200 parts, then the

target system/line takt is 20 , and the system is too slow. If there are two machines in

parallel producing parts, then the machine takt or process takt is 48 , but the target

machine takt or target process takt is 40 .

The Throughput

Fig1.3 How many per hour(www.allaboutlean.com)

The throughput is simply the inverse of the takt time, although usually only used for actual or

target production, and only rarely for the customer demand.

It also must include losses. Hence, we can also have a system or line throughput, a target

system/line throughput, a machine or process throughput, or a target machine/process

throughput. This naturally must be measured in .

The Cycle Time

Fig 1.4 Also a cycle, although the measurement RPM

is closer to a throughput(www.allaboutlean.com)

The cycle time is like the takt measured in . The important and often confused difference,

however, is that the cycle time does not include losses! The cycle time is the fastest repeatable

time in which you can produce one part. i.e it is an idealized time that we need per part if

everything goes perfect, having no breakdowns, quality defects, or other problems.

Hence, we cannot simply divide the production time by the number of parts, but it can be done to

have to measure every part individually, and figure out what the system can do under ideal

circumstances. Here we may choose not to use a mean, but instead use a median, or even a lower

percentile, e.g. speed of the 10th percentile. Please note that you can add means to get the mean

of the lead time, but this does not work with medians or percentiles.

Cycle times are usually measured for individual processes, where you have both a  cycle time for

the current state and a target cycle time for the speed you actually want. By the way, the

difference between the cycle time and the takt time of a process is the OEE.
It is also possible to calculate a system or line cycle time for an entire system. You would have to

figure out how fast the system would be if there are no losses. If you have only sequential

processes with each process cycle needed only once for the final product, then the system cycle

time would be the slowest/largest process cycle time. Similarly, you can set a target system/line

cycle time. However, due to the interactions of the losses in the processes that slow down the

system in reality in my view it is difficult to use a system cycle time number in a meaningful

sense.

If you have batch processes, you also would have to distinguish if you are measuring the time per

batch or the time per part. Depending on what you use the measurement for either one may make

sense. If you want to figure out how fast the batch process should be, then of course you set the

cycle time for the entire batch. If you want to find out if the batch is fast enough for the

customer, and your customer takt is in individual pieces, then you would need the cycle time of

an individual part, and see if it is fast enough for the customer takt if you also include OEE

losses.

The Lead Time

Use Little’s Law for the Lead Time

The lead time is the time it takes for a single part to go through the entire process or system.

Therefore, this way of measuring production speed is quite different from the takt time, cycle
time, and throughput above. The takt/cycle time is important if you want to know if you can

produce enough. The lead time is important if you want to know if you can deliver on time.

If the cycle time is good but the lead time is not, then you will have enough but too late. On the

other hand, if the lead time is good but the cycle time is not, you will buildup unprocessed orders

which increase the lead time and hence you will have neither enough nor on time.

Similar as with the cycle times, we have a process or machine lead time, a line system or lead

time, and of course all of them also as target values: target process/machine lead time and target

system/line lead time.

To measure the lead time of parts directly is in practice quite difficult. However, there is a very

cool fundamental law in production systems that allows you to determine the lead time based on

the throughput and the work in progress (WIP): Little’s Law, with

 L – Inventory, measured, for example, in units or quantity

 λ – Throughput, measured in units or quantity per time

 W – Lead Time, measured in time

This is actually one of the equations in lean manufacturing, since it is valid  everywhere as long

as you have a stable system (i.e. no ramp up or other system changes).

What about Process Time?

Another term often used is process time. However, here it gets a bit confusing. Some see process

time as the sum of the cycle times in a series of processes, i.e. excluding losses. Others use it as a

synonym to lead time. Yet other describe it as a synonym to cycle time or sometimes also takt

time.

DEFINATIONS OF SOME TERMS

Takt time: This the maximum amount of time in which a product needs to be produced in order

to satisfy customer demand. The term comes from German word “takt which mean pulse”.

Overall equipment effectiveness (OEE) is a measure of how well a manufacturing operation is

utilized (facilities, time and material) compared to its full potential, during the periods when it is

scheduled to run. it identifies the percentage of manufacturing time that is truly productive.

Agile manufacturing(AM) is a term applied to an organization that has created the processes,

tools, and training to enable it to respond quickly to customer needs and market changes while

still controlling costs and quality.

1.2 PROBLEM STATEMENT

The strong association between the concept of measuring manufacturing speed and the use of

automated equipment has, somehow, limited the view on manufacturing flexibility and speed in

agile environment therefore originated a significant number of approaches focusing solely on

technological aspects. At the same time, this focused view has neglected alternative ways to achieve

flexibility and how measuring manufacturing speed is being determined without necessarily relying on

expensive and sophisticated manufacturing equipment. Regardless of their technological advance,

manufacturing systems’ performance will always be determined by the interactions occurring among

different system components.. Consequently, it is important to identify those components providing

manufacturing systems with the capability to maintain an acceptable performance under the influence

of restricting conditions and, ultimately, achieve manufacturing flexibility in agile system.

1.3 Aim and Objectives of the Study

The general objective of the present study is of two aspect. On the one hand, the objective is to contribute

to the achievement of a better understanding on the concept of measuring manufacturing speed in

agile manufacturing environment and the alternative means by which it can be achieved. On the second

hand, the objective is also to demonstrate that not only manufacturing measuring speed can be

achieved by means of sophisticated equipment but also by the combined capabilities of different system

components. In order to accomplish the general objective, the following specific objectives are

considered:

i. To identify different approaches on how measuring manufacturing speed are being determined

by reviewing relevant literature.

ii. To categorize the different methods and tools by which the objective can be achieved.

iii. To develop a hypothetical model representing a particular manufacturing system, this will

constitute the source of data for this study.

iv. To identify components, and their associated characteristics, providing the system with the

ability to perform under different disrupting situations .

 CHAPTER 2

LITERATURE REVIEW

2.1 Introduction

Agile manufacturing is essentially an approach a manufacturing company takes to manufacture

products. It looks at the processes, tools and training the company is using in order to respond to

customer needs and market changes. An agile manufacturing strategy would use processes, tools

and training, which enables it to respond to these needs and changes rapidly without jeopardizing

the cost and quality of the product.

The focus of agile manufacturing lays on the response time and the aim is to react to customer

needs quickly. Therefore, agility and speed become the competitive advantages of agile

manufacturing.

The processes, tools and training are often supported by a highly integrated information

technology system. The products tend to be highly customizable and modular. The technology is

used to allow different players (marketers, designers, production team) to share data and to use it

to solve problems that might slow down the process otherwise. The emphasis is on correcting

quality issues and implementing changes at the earliest point in the manufacturing process, as

this is considered cheaper and quicker than corrective actions later on.

This requires agile manufacturing organizations to be structured differently compared to

traditional manufacturers. These organizations tend to have flatter hierarchical structures, as

employees need to react quickly to customers’ needs. This also requires the organizations to have

high levels of communication to ensure changes are implemented swiftly.

Furthermore, agile manufacturing is prevalent in well-developed local markets. Agile manufacturers

benefit from the proximity to the local market, as it can improve speed and agility. Implementation of

changes to products can be much more effective in these markets. Moreover, being close to the customer

ensures that agile manufacturers can respond to even slight changes in customer behavior quickly.

The Key Elements of Agile Manufacturing

The model of agile manufacturing is built on four core elements. These include Modular Product

Design, Information Technology, Corporate Partners, and Knowledge Culture.

Modular Product Design

Agile manufacturing tends to create products, which allow modification and variation quickly.

This is best achieved by the Modular Product Design approach, which means products are

designed in a modular fashion. Modular products are typically built from a number of different

pieces, allowing fast and easy variation.

For example, instead of creating the product from a single piece of material, the manufacturer

would create smaller pieces that fit together to create the product. If you’d want to change a

specific aspect of the product, you wouldn’t need to change the whole process. You could simply

make design changes to an individual piece, while still changing the overall look or function of

the product.
Information Technology

Agile manufacturing also involves the use of information technology, especially in order to

improve internal and external communication. This is essentially about dissemination of

information throughout the organization to ensure employees are up-to-date and able to respond

quickly.

Proper implementation of information technology allows employees to make decisions quicker

in terms of product design. Furthermore, it allows a rapid response time to customer queries, as

information is disseminated quickly across the different platforms.

Corporate Partners

On the contrary to the traditional model of manufacturing, the agile manufacturing model aims to

leverage relationships with other companies. Short-term partnerships and co-operative projects

are encouraged, as they can help the company to enter and adjust to new or changing markets

quicker.

The company will be better suited to improve time-to-market for products by working closely

with companies that are already present in these markets. For example, introduction to a new

market can be quicker by using an existing supplier in this market prior to establishing your

presence there.

Knowledge Culture

Finally, agile manufacturing relies heavily on the creation of a knowledge culture. This means

agile manufacturers invest in employee training to ensure rapid change and adaptation are
understood and supported throughout the organization. When a company is considering

implementing agile manufacturing, creation of knowledge culture will be key to success.

Switching to agile manufacturing is not always easy and appropriate training should be provided

to support employees during the process.

Lean Manufacturing and Agile Manufacturing System

When an organization is considering ways to organize its manufacturing process, they can come

across another manufacturing concept called lean manufacturing. While both lean and agile

manufacturing can help companies lower costs, improve customer service and boost

responsiveness, there are certain differences in these methodologies.

Lean manufacturing is focused on minimizing the costs of manufacturing. The focus is therefore

on demand-based manufacturing, which aims at eliminating investments in inventory. Lean

manufacturing involves improving the effective use of utilities, facilities and materials. The

process is driven by the mind-set that it can be constantly improved to make manufacturing more

cost efficient. Therefore, lean manufacturing emphasizes improvement and the measurement of

performance.

You could view both models through the analogy of a person. One could be a thin person or one

could be a fit person. Thin and fit is not the same, but a person can also be thin and fit. Similarly,

an organization can be a lean or an agile manufacturer, or the company could become both.

However, an agile manufacturing plan doesn’t automatically mean it’s also lean.

In fact, lean manufacturing is often considered the precursor of agile manufacturing. This is

because lean practices can enable agile manufacturing practices. The similarities of these models include:
 i. Support of revenue creation and sustainability

ii. Improved competitiveness

The combination of a lean and an agile manufacturing approach is often referred to as ‘leagile’

manufacturing. Leagile manufacturing can be achieved by using several different approaches,

including:

i. Combination of a lean make-to-stock manufacturing approach for products in high

demand and make-to-order agile manufacturing approach for other products.

ii. Creation of a flexible production capacity for responding to demand surges or unexpected

customer requirements.

iii. Implementation of postponement strategies, which allow the base product to be

manufactured in advance, with the final assembly and configuration adding the variation

and changes needed based on the final customer order.

The key is to understand both approaches and the benefits of using either strategy. Ultimately,

the decision of choosing the right manufacturing system depends on your organization’s needs,

as well as the type of product you are manufacturing. While lean and agile manufacturing can

have beneficial synergies to keep in mind, these two approaches are ultimately different in terms

of implementation and focus.

Agile Manufacturing Plan

Implementing agile manufacturing in your organization will require careful planning. The

process is by no means easy, but the following steps will ensure you focus on the key issues

when considering the agile approach.

1. Research

First, you must conduct extensive research into agile manufacturing. The most important aspects

to understand and study include:

i. The cost of agile manufacturing

ii. The processes required for agile manufacturing

iii. The concrete tasks involved in the processes

You should understand these three aspects in relation to your business. For example, the cost

of implementation can vary depending on the industry you operate in and the business model

you are using.

One of the ways to get a better understanding of the above points is by examining other

businesses. You should try to find organizations similar to your business, which have

implemented agile manufacturing in the past.

Furthermore, consider the benefits and downsides to transforming your current

manufacturing model into an agile model. We’ll discuss the advantages and disadvantages in

more detail in the following section. Consider the points in terms of your business and get a

better understanding whether the benefits outweigh the costs in your circumstances.

It’s essential to understand certain products are more suitable for agile manufacturing than

others. Examine your products and ask the following questions:

i. Would this product benefit from better personalization? Is there a potential market for creating

the product as a modular product model?

 ii. Do you know of a product that could be developed through agile manufacturing model? What

competitive advantages could your business provide to such a product?

2. Appoint a task force

Implementation of an agile manufacturing plan will take time and you should clearly define the

people in charge of managing this change. This not only helps smoothen the process, but it also

ensures accountability.

Assemble a task force in charge of creating a plan for agile manufacturing. You can shift job

responsibilities within your organization to allow a group of people to focus on the task. Previous

knowledge of agile manufacturing can be beneficial, but the key is to support the group and

provide them with the necessary resources. Make sure a board member is part of the team, as this

change is a strategic shift that will shape the future of your business.

The task force should provide regular updates on the process. The group should have a clear set

of objectives it needs to achieve and you want to implement a timetable for the process.

The task force should play an important role in creating the knowledge culture in the company.

Whilst you want to narrow down the amount of employees who are in charge or researching the

ways to implement agile manufacturing, you want to have everyone in the organization involved

in the process. According to the State of Agile Survey, conducted by software provider Version

One, “general resistance to change” is among the biggest barriers of agile adoption in

organizations. Over 40% of respondents felt there’s a tendency to resist change within

organizations and this can hinder the effectiveness of agile manufacturing.

3. Examine current supplier relations

Since partnerships are the key to agile manufacturing, you should examine your existing

partnerships before implementing the new approach. You will find this important for two

reasons:

 First, it ensures you strengthen stable partnerships, which enhance agile manufacturing.

 Second, it enables you to locate partnerships that don’t work for your benefit.

You should re-evaluate your existing supplier partnerships to categorise your relationships to the

above two groups. You can take advantage of relationships that might be beneficial for agile

manufacturing and get rid of the ones, which are not strengthening your organizational

capabilities. Do not stick to suppliers that cause problems, especially in terms of responsiveness

and speed.

4. Draw a long-term plan

Finally, you should establish a long-term plan for agile manufacturing. The implementation

process will take time and getting agile manufacturing to full speed will be an enormous task.

You should draw a long-term plan together with the task force. This plan should include:

i. Benchmarks – What are the signs of success for your business? How can you measure the

objectives?

ii. Milestones – When should key objectives be accomplished?

iii. Contingencies– What if things go wrong? How to correct mistakes or change direction?
Preparing for eventual obstacles or problems should be an important priority for the team. Major

changes to organizational structure, such as the implementation of an agile manufacturing plan,

will need to weather the storms, so to speak. It is important to outline possible problems and

obstacles beforehand, as well as have a plan for overcoming unexpected situations.

2.2 THEORECTICAL BACKGROUND

In the last decade the industrial environment has undergone substantial changes characterized not only by

their breadth and depth but also by their speed. In this context, firms in general, and those dedicated to

manufacturing in particular, are finding it difficult to attain a sustainable competitive advantage or even

ensure their survival due to the high levels of complexity, dynamism and uncertainty they face Vazquez-

Bustelo and Avella( 2004). This critical situation has forced firms to review their competitive priorities,

triggering a transition process in which they are giving up traditional manufacturing models in favor of

new organizational forms, new management practices and new strategies at all levels (Bartezzaghi(1999).

A transformation has been observed in ‘‘traditional’’ production models leading to a new production

paradigm linked to agility. With this move towards a new agility-based paradigm, the term ‘‘agile

manufacturing’’ has arisen, a concept that has been increasingly used in literature on Operations

Management and Business Administration to denominate a model of flexible manufacturing, capable of

rapidly adapting to changes in the environment and of placing a large variety of products on the market to

satisfy the needs of increasingly demanding and well-informed customers (Kidd(1994) Goldman et

al(1995) Gunasekaran, 1999; Sharifi and Zhang, 1999; Gunasekaran et al., 2002). This emerging

paradigm, the philosophy of which considers a new strategic positioning in manufacturing and requires a

global view of the firm Roth( 1996), breaks with the guidelines of the traditional mass production model,

placing special emphasis on the proactive adaptation to change Yusuf et al., (1999). It highlights the

development of dynamic capabilities, the strategic use of new technologies, the integration of strategies
and operations, customer satisfaction through new forms of inter-firm cooperation and knowledge

management (Gunasekaran and Yusuf, 2002).

The pioneering work done by the Iacocca Institute describes agile manufacturing as a new manufacturing

infrastructure, establishing a list of systems and sub-systems enabling agility, all of which are related to

continuous change, responsiveness, quality improvement and social liability in environmental and

working condition terms.

According to Kidd (1994), agile manufacturing is on three basic resources: (a) an innovative management

organization and structure, (b) a worker base consisting of highly trained, motivated and empowered

people and (c) advanced, flexible and intelligent technologies. Agility is obtained by integrating these

three resources in an interdependent and coordinated system. For Goldman et al. (1995), agility is a global

response to changes imposed by a new business environment dominated by a set of forces that attempt to

break with mass production systems and are characterized by change and uncertainty. These authors

identify four dimensions or foundational elements of agile manufacturing: (a) enriching the customer, (b)

cooperating to enhance competitiveness, (c) mastering change and uncertainty and (d) leveraging the

impact of people and information. For each of these dimensions they establish a list of characteristics of

the agile firm that have been considered by many authors as the starting point in their works on agility.

Despite the fact that agility has been defined in different ways and from different perspectives and fields

of knowledge, a common element to all the definitions is that it is far infrastructure that provides

flexibility, speed, quality, service and efficiency and enables firms to react deliberately, effectively and in

a coordinated manner to changes in the environment. In spite of theoretical study and interest in agile

manufacturing amongst research and business circles, there has been little empirical study on its causes,

forms and results so little is known about how to apply it and what results can be expected. Research

should therefore aim to answer the following questions. Are companies really changing their behaviour

and systems in order to become agile manufacturers? What contextual factors or environmental changes

are making it necessary to implement agile manufacturing? What practices and strategies allow
companies to enhance their agility? What results can be expected from implementing agile

manufacturing?

The main objective of this research is to explore the application, causes and consequences of agile

manufacturing in Nigeria, through in-depth analysis,industrial case study in Nigeria.