Operations Payoff

Rick's Blog - your source for news and insights into Operations and Supply Chain Management.

Agility Requires Speed

The key to successful supply chain management is reliability and predictability of supply: knowing how much you’re going to get and when you’re going to get it. Take as an example a manufacturer who had trouble finding a reliable source for a simple metal flange used by their plants in Mexico. They had to choose between storing a lot of inventory or changing their supply chain. In this case, they began buying the part in the US and shipping it to their facilities in Mexico.

Another issue is agile operations. There’s a difference between agile and lean. The Toyota production system is actually founded on speed: how can we be faster and still produce a high quality product at a lower cost? The right part in the right place at the right time at the lowest possible cost requires speed, so agility is about being fast, flexible, highly responsive. Lean focuses on eliminating waste – it’s related but not the same.

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