Supply chain management aims at improving the flow of information, products, and services from suppliers to stakeholders and supports organizations achieve Agility. It involves a process of planning, monitoring, analysing, developing, and controlling the supply chain system of a company to generate value for the customer. This whole concept of the supply chain management process depends upon the size and culture of the organization. So, companies to improve their flow of production needs to follow or apply a certain methodology that makes their supply chain more effective and flexible.
In this blog post, we discuss the two supply chain management processes, that is Lean supply chain and Agile supply chain management. Let’s discuss how these two methodologies help businesses to keep their cost down and at the same time are delivering the right amount of value at the right time.
Also, for Business Agility, consider reading the article “How Lean Portfolio Management can help you achieve Business Agility.”
Lean Supply Chain Management
A Lean Supply Chain strategy involves eliminating the unvalued elements that slow the production process. It focuses on reducing waste and costs to improve the supply chain process. This type of supply chain management concentrates on reliability and predictability.
Here, the production plan is framed months or even years ahead. And makes it easy to determine the lowest possible cost for a large amount of goods. But with the changing speed of the market and customer demands, businesses started moving away from this lean model of methodology.
To understand the other aspects of the Lean process, check out this article “The Role of Lean Portfolio Management in Enterprise Agile Transformation.”
Agile Supply Chain management
Agile Supply Chain Management focuses on adapting to changing demands. It is highly flexible and can adapt to unpredicted changes that happen in technology. It also adapts to the customer’s demands and concerns with economic changes too. This methodology helps companies to quickly implement changes that adjust their sourcing and sales processes.
Comparing Lean and Agile Supply chain strategies: Which is right for you?
To run a business covering a wider view of the market, it is important to decide on some factors such as the customer needs and size of the projects. For a business to implement Lean and Agile Supply Chain strategies depends on the requirements and nature of the projects.
If you are looking to enhance your supply chain management process and are doubtful about choosing the right supply chain strategy, consider understanding the concept of Lean and Agile supply chain strategies discussed above. For further guidance have a look at the below-mentioned points.
The first and foremost step to finding the right strategy starts with conducting basic market research and the stakeholder’s requirements. Before determining the supply chain strategy for your business consider asking yourself the following questions such as,
1. What the product is about?
2. What is the demand for the product throughout the year?
3. Any fluctuation in the demand for the product you are about to produce? Does it affect your consumers and their spending habits?
4. How fast does the market change?
5. What does your current supply chain look like? Does it align with the requirements?
If you are clear with the questions discussed above, you have the clarity to select the right strategy for your business. And with the right agile professionals who have completed courses like Lean Portfolio Management Training and Agile Management training, managing processes becomes easy.
Coming to choosing the right supply chain management process between Lean and Agile supply chains, if your business demands no changes you can go with a linear model process that is Lean Supply Chain management that considers reducing the waste. And if your business requires addressing sudden changes in supply and demand, Agile Supply Chain management works the best.
In conclusion, the difference between Lean and Agile Supply Chain management is their focus and the problem they solve. Choosing between the Lean and Agile depends on what the organization is looking for. The Lean supports cutting the cost and producing a high amount of value. Whereas, Agile focuses on providing flexibility and adaptability to improve the Agility of a company.
For further reading, go for “How to Lead an Enterprise Lean Agile Transformation.” to lead an agile transformation for your organization.
1. What are the challenges in implementing Lean Supply Chain Management?
Some of the common challenges in implementing Lean Supply Chain Management are complying with changes, suppliers aligning with the principles and practices of Lean, and maintaining processes consistently.
2. What are the important aspects of Lean Supply Chain management?
Lean Supply Chain strategy includes techniques and tools such as Kanban Systems, Kaizen, Value Stream Mapping, and more. This process also covers, applying Lean practices, tracking progress with metrics, and identifying inefficiencies.
3. What are the challenges in implementing Agile Supply Chain Management?
Some of the challenges of Agile Supply Chain Management include aligning with the traditional approach, managing the complexity of frequent changes, and feeding the business leaders and team members with agile mindset and practices.
4. What are the benefits of applying Agile Supply Chain?
Implementing Agile Supply Chain improves productivity, eliminates wastes that slow the process, increases customer satisfaction, and operational efficiency, and improved processes to drive data for informed decision-making. And it also helps to give quick responses to the market changes to improve visibility.
About Advance Agility
We, at Advance Agility, are the new-age Agile Coaching, Consulting and IT services company. We enable end-to-end Digital Transformation. Agile execution is integral to our being. We are doing SAFe implementation with small, medium and large organization across the globe. Our vision is to be the leading Agile execution player globally. To keep adding value at every process stage. We are on a mission to empower our clients, move from concept to cash in the shortest sustainable lead time by adopting human centric approach to business agility. Embracing the change is in our DNA. Things that keep us apart are Quicker and Seamless execution with End-to-end gamut of services. Our Global presence and Stellar Track Record give us an edge over our competitor.
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