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Lean Production and Agile Manufacturing in Supply Chain Management:

Agile manufacturing is a management system in which people, technology, and managers are organically combined. Through reliable and reusable information technology, it can quickly respond to market changes and meet customer needs. Agile manufacturing is aimed at the production needs of small batches and diversified varieties, working in small groups, focusing on the flexibility and quick response of the production process. Agile manufacturing is aimed at changing markets and can use relevant market knowledge and enterprise virtualization operations to tap profitable areas, no matter whether it is any time, any place, or any quantity, agile manufacturing provides the supply chain with advantages in dealing with changing market demands, while lean production provides balanced production scheduling and the function of reducing system operating costs in the operation of the supply chain.

In the relationship with suppliers, Lean has more stable suppliers after the test and has a long cooperation time, and agile dynamically selects the best suppliers and the cooperation time is short; both have more trust in suppliers. A lean supply chain is a supply chain composed of enterprises, suppliers, and sellers, while an agile supply chain is a dynamic alliance and virtual enterprise formed by the core manufacturing capabilities of multiple enterprises. Lean production is based on simplification and market forecasting to reduce the impact of changes in market demand on production operations, so it cannot adapt to excessive changes in market demand. The agile rapid reconfiguration capability makes it suitable for a dynamic and unpredictable market environment. Based on the above analysis, we can start with the tasks and goals of supply chain management. Since tasks such as procurement, design, manufacturing, assembly, and sales in the supply chain can be completed by superior enterprises, they can be realized in the form of virtual enterprises in agile manufacturing. Its organizational management and operation control to quickly respond to market demand and improve service levels, to improve the operational performance of the supply chain from the perspective of time and service. Based on the understanding of logistics in the supply chain, the concept of lean production value-added chain can be used. By identifying the value chain composed of key business activities, and trying to eliminate all non-value-added activities, to ensure the quality of products and balanced production, to improve the operational performance of the supply chain from the perspective of cost and quality. The core ideas of lean and agile can be applied to supply chain management.

From a logistics point of view, there is a separation point in the supply chain, which separates the supply chain into those driven by market demand and those driven by market forecasts. Its position in the supply chain is determined by the waiting time expected by customers from placing an order to obtaining a product. The part of the supply chain before the separation point is called the upstream part, and the part after it is called the downstream part.

Since the demand for products the upstream of the supply chain is relatively stable, cost and quality should be regarded as competitive factors, while the downstream of the supply chain, which is directly guided by market demand, has higher requirements for product diversity, variability, and production flexibility, and should focus on time and service as a competitive factor. Lean production is suitable as a strategy for managing the upstream business activities of the supply chain, while agile manufacturing is more suitable for managing the downstream business activities of the supply chain.

Lean production emphasizes the relatively stable production of products and the relatively stable operating environment, emphasizing the elimination of any worthless activities to reduce the cost of products. Thereby improving the quality of products and meeting the strong competitive trend of the market. Agile manufacturing emphasizes rapid improve customer service levels by responding to elusive and unpredictable changes in demand from the outside world. For the supply chain, the integrated application can play a complementary role in performance. Manufacturing enterprises should take advantage of both and apply them to the management of the supply chain so that the effect of integrated management is more prominent.

What is Agile Manufacturing?

Agile manufacturing refers to the use of modern communication means by manufacturing enterprises, by rapidly deploying various resources (including technology, management, and personnel), and responding to user needs in an effective and coordinated manner to achieve manufacturing agility. Agile manufacturing is a research program supported by the US Department of Defense to designate the development of manufacturing in the 21st century. A new production method, namely agile manufacturing, is proposed, which not only reflects the special interests of the Ministry of Defense and the industry but obtains common interests.

Agile manufacturing is implemented under the support of three major resource pillars: innovative organizational and management structure, advanced manufacturing technology (led by information technology and flexible and intelligent technology), and skilled and knowledgeable managers. Production technology, a skilled and knowledgeable workforce, and agile management that facilitates cooperation within and between enterprises, are brought together to respond quickly to rapidly changing market demands and market progress through a common infrastructure established. Agile manufacturing is more sensitive and quicker than other manufacturing methods.

• Advantages of agile manufacturing: Faster production, lower cost, higher labor productivity, faster machine productivity, higher quality, improved production system reliability, reduced inventory, and suitable for CAD/CAM operations.
• Disadvantages of Agile Manufacturing: Expensive to Implement.

Key Elements of Agile Manufacturing Practices:

Agile manufacturing mainly includes three elements: production technology, organization method, and management method.

The purpose of agile manufacturing can be summarized as the integration of flexible production technology, skilled and knowledgeable labor, and flexible management that can promote cooperation within and between enterprises, through the establishment of a common infrastructure, for rapidly changing markets. Demand and the market respond quickly. It can be seen from this goal that agile manufacturing includes three elements: Production technology, management, and human resources.

1. Production Technology:
   Agility is achieved by integrating the three resources of technology, management, and people into a coordinated, interrelated system. Production equipment with a high degree of flexibility is a necessary condition for creating an agile manufacturing enterprise. The specific embodiment of the necessary production technology in the equipment is a programmable flexible tool unit composed of modular manufacturing units that can be changed in structure and measurable; intelligent manufacturing process control device. Use sensors, samplers, analyzers, and intelligent diagnostic software to perform closed-loop monitoring of the manufacturing process, etc. In the product development and manufacturing process, the computer ability and the knowledge base of the manufacturing process can be used to design complex products with digital computing methods. The characteristics and states of the products can be simulated reliably and the manufacturing process of the products can be accurately simulated. Develop new products, formulate production process regulations, and conduct product sales. Design work is not only in the field of engineering, nor is it just a combination of engineering and manufacturing. Representatives at every stage participate in product design throughout the entire product life cycle, from the manufacture of the finished product from the material to the final scrapping of the product. Technology can play a full role in shortening the development and production cycle of new products.
   An agile manufacturing enterprise is a highly integrated organization. Information flows continuously between manufacturing, engineering, market research, purchasing, finance, warehousing, sales, research, etc., but between agile manufacturing companies and their suppliers. In an agile manufacturing system, both users and suppliers should play an active role in product design and development. Every product may use a highly interactive network. Physically dispersed and organizationally separated people from the same company can work with each other and with people from other companies. Bringing together the dispersed departments of an enterprise relies on rigorous universal data exchange standards, robust components, and broadband communication channels. The integration of all these technologies into existing enterprise integration software and hardware marks the beginning of the era of agile manufacturing. Agile manufacturing enterprises will generally use reliable integration technology to perform reliable large-scale software replacement without interrupting system operation.
2. Management Technology:
   One of the most innovative ideas in the management of agile manufacturing is the virtual company. Agile Manufacturing believes that the speed at which new products are brought to market is the most important competitive advantage. The fastest way to launch a new product is to use the resources of different companies so that the human resources and material resources distributed in different companies can be exchanged at will, and then integrate into a single business entity that is connected by electronic means-virtual company, to complete specific tasks. A virtual company is like a company specialized in accomplishing a specific project, if the market opportunity exists, the virtual company exists. The plan is completed, the market opportunity disappears and the virtual company disintegrates. The ability to frequently form virtual companies will be a powerful competitive weapon for businesses. If the enterprise resources are distributed in different places can be centralized, and an agile manufacturing enterprise can form a virtual company at any time. Combining a comprehensive industrial database with services to enable corporate groups to create and operate virtual companies, remove legal barriers to multi-enterprise cooperation, and the establishment of standard legal models. In this way, building a virtual company is as easy as setting up a company.
   Some companies always feel that independent production is better than cooperation, this concept must be broken. Overcoming organizational barriers to working with other companies should be the priority, not the last. In addition, it is necessary to solve intellectual property rights issues arising from cooperation, develop techniques for managing companies, mobilize the initiative of personnel, find ways to establish and manage project teams and establish standards for measuring project team performance. Agile manufacturing enterprises should have organizational flexibility. As a fiercely competitive environment for advanced industrial products and services has begun to take shape, more and more products are entering the ever-changing world market to compete. The design, manufacture, distribution, and service of products will be completed with resources (company, talent, equipment, materials) distributed around the world. Manufacturing companies are increasingly required to meet the objective conditions of each region. These objective conditions not only reflect social, political, and economic values but reflect people's concerns about environmental security, energy supply capacity, and other issues. Using traditional forms of vertical integration in this environment is doomed to fail, and a dynamic organizational structure with a high degree of flexibility is required. According to the different work tasks, it can take the form of an internal multi-functional team, and invite suppliers and users to join the team. Sometimes it can take the form of a partnership with other companies, or can take the form of a virtual company. Effective use of these means can make full use of the company's resources.
3. Human Resources & Organization:
   The basic idea of agile manufacturing in human resources is that in a dynamic competitive environment, the key factor is people. Flexible production technology and flexible management should enable the personnel of agile manufacturing enterprises to realize their inventions and rationalization suggestions. There is no one-size-fits-all principle to guide the operation of such a business. The only viable long-term guiding principle is to provide the necessary material and organizational resources to support the creativity and initiative of people.
   In the era of agile manufacturing, the continuous innovation and development of products and services, and the continuous improvement of manufacturing processes, are synonymous with a competitive advantage. Agile manufacturing enterprises can maximize human initiative. Knowledgeable people are a valuable resource in an agile manufacturing enterprise. Therefore, it is a long-term investment that enterprise management should actively support to continuously educate and improve the quality of personnel. The better each employee's ability to digest and absorb information and respond creatively to the possibilities presented in it, the more successful the business is likely to be. This is true for managers and workers with technical expertise on the production line. The participation of scientists and engineers in strategic planning and business activities is a decisive factor for agile manufacturing companies. The collaboration of engineering experts is an important resource at all stages of scientific and technological knowledge of the manufacturing process and product research and development.
   Everyone in an agile manufacturing enterprise should realize that flexibility can transform an enterprise into a general-purpose tool. The application of which depends only on one's imagination of working with this tool. The production facilities of a mass-production enterprise are dedicated, and therefore, such an enterprise is a dedicated tool. In contrast, an agile manufacturing enterprise is a continuously evolving manufacturing system whose capabilities are limited only by the imagination, creativity, and skills of people, not by equipment. The characteristics of an agile manufacturing enterprise govern its attitude towards personnel management which is completely different from that of mass production enterprises. An adversarial relationship between managers and employees that limits employees' access to information about the state of the business is not tolerated. The information must be fully disclosed, and a relationship of mutual trust must be established between managers and employees. The workplace must not only be complete but attractive to those engaged in intellectually creative activities at every level of the business.

The Core Idea of Agile Manufacturing:

To improve the ability of enterprises to respond quickly to market changes and meet customer requirements. In addition to making full use of the internal resources of the enterprise, it can make full use of the resources of other enterprises and even the society to organize production.

• The entire product life cycle, starting from product development, is designed to meet user needs.
• Adopt a dynamic and changeable organizational structure.
• Focus on long-term economic benefits.
• Establish a new standard system to realize the integration of technology, management, and people.
• To maximize the mobilization and play the role of people.