The Supply Chain Strategy Conundrum: To Be Lean or Agile or Lean and Agile

1. Review the article and summarize the key concepts behind the ‘space-time’ matrix.

The article is emphasizing on the application of lean principles alongside agile. Here the author is elaborating the complexity of implementing lean principles to reduce waste or Muda along with a flexible manufacturing process (agile). This is further explained through a “space-time” matrix wherein the three situations are briefed with cases. Three cases being – different space and same time, same space and different time and different space and different time. The fourth possibility of same space and same time is not viable as the possibility of implementing lean and agile together on a same product at same time and a same production line is not possible.

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The “space-time” matrix is used to explain the basis of lean and agile application in supply chain. Based on the demand of a product how the process can be changed to agile and for a fixed or base demand how a process can be designed lean. To explain the matrix the author has chosen three different cases and showed how supply chain is interrelated with market strategy.

The first case explained is for different space and same time, where national bicycle was losing its market share in Japan because of cheaper imports in the bicycle market. To overcome the same and its market share, the company came up with an idea of mass-customization during summer season. During summers the demand was high as people buy it more for recreation activities at cheaper prices and shorter lead times. To meet this demand at an affordable price (only 15% higher) and quick lead time of 2 weeks, the company came up with postponement of processes such as welding, painting and assembly till the orders are received. This was the time of the year where they go in agile mode for six months and with mass customization and low lead times they could capture the market share of 29%. Whereas, for the remaining six months the company manufacture standard sports bicycle in lean mode. This is a classic example of same space and different time in the matrix, where the company segregated the base demand form the surge demand of the summers following lean in winters and agile/flexible processes in summers.

The second case describes a dilemma of a carpet manufacturing company which has a lead time of 16 weeks but reduced it to 4 weeks using lean techniques but were not able to keep the process agile to introduce changes for varying customer requirements bounded by delivery times. To address the challenge the company separated one of the process of dying from the rest of the six manufacturing processes. By implementing this the company could meet a small portion of customized demand of 10% with 1-weeks delivery time involving themselves in agile techniques. This case gives an insight of different space and same time quadrant of the matrix, where they applied lean principles to most of their demand and agile for a portion of it in a different space and same time setup.