The Principle of Legality - Essay Example

 The Principle of Legality In the current global scenario, there are two kinds of paradigms that have been developed, namely lean thinking and agile manufacturing. However, because these two paradigms may not have developed at the same time, there is a general tendency to view them in a progressive sequence, as isolated elements that are separate from each other. Naylor et al(2000) have however argued that this may be a simplistic view to adopt, because despite the fact that these two paradigms may be different from each other, the best elements of both paradigms can be successfully designed and combined into one integrated supply chain. Such an integrated supply chain would be especially effective if it is designed after the market knowledge is taken into consideration and the decoupling point is properly determined. The principle of leagility is based upon the premise that two different kinds of initiatives can be successfully combined in improving the efficiency of the supply chain and making the agile supply chain a reality. One of these aspects is postponement and the other is information decoupling, and Naylor et al (2000) have argued that these two can be combined into leagility, or the combination of both agility as well as lean capabilities into one supply chain. Agility is defined as “using market knowledge and a virtual corporation” in order to be able to exploit the most propfitable opportunities within a volatile marketplace. Leanness on the other hand, refers to the development of a value supply chain stream that ensures that all kind of waste, including any waste of time, are all eliminated.(Naylor et al, 2000:108). The supply chain is defined as a “system whose constituent parts include material suppliers, production facilities, distribution services and customers”, all of whom are linked together in a cycle where there is a forward flow of materials and a backward flow of feedback. The decoupling point is the one that separates that part of the supply chain that is oriented towards the generation of customer orders from that part which is based upon planning. (Naylor et al, 2000:108) Naylor et al (2000) also point out that agile manufacturing is the best suited to meet a market situation where there is fluctuating demand, while lean manufacturing on the other hand, requires a level schedule but when these two elements are combined with the market knowledge taken into consideration, the decoupling point can be positioned correctly. The leagility approach therefore essentially attempts to incorporate lean production methods while also adapting to a fluctuating market. Incorporating leagility requires adaptability to the attitudinal context. The nature of the paradigm that is chosen at every stage of the lean production process depends upon the requirements of the customer. (Naylor et al, 2000:112). The decoupling point is therefore that point which separates the part of the supply chain which directly responds to the customer from the rest of the chain which makes planning provisions such as buffering stock levels in order to anticipate changes in customer demand. Such changes in demand would arise due to the variability inherent in this aspect, because customer attitudes and receptivity to different products is likely to change due to changing customer attitudes. Hence, buffering the supply chain beyond the decoupling point would ensure that variability in customer demand due to attitudinal changes and fluctuations in the market could be easily accommodated. The concept of leagility also plays an important role in terms of accommodating technological changes. For example, redesigning the supply chain by applying agility downstream from the decoupling point was successful in Hewlett Packard’s case in overcoming problems associated with variability in demand. Electronic supply chains are especially vulnerable to the vagaries of the market, because of technological changes and improvements on products that need to be also included within the large and often complex supply chains (Naylor et al, 2000:115). In the case of Hewlett Packard, the supply chain consisted of a large number of interacting, but un-integrated members. The remedial measures introduced by the Company included reducing implant lead times through the elimination of wastes as well as developing an integrated approach to materials planning. One of the problems associated with the supply chain in the case of electronic products is that technological changes require product differentiation in order to accommodate customer demand which varies accordingly. This could be addressed by using electronic data exchange to transmit requirements simultaneously to all of an electronic company’s plants. In the case of Hewlett Packard, applying agility downstream ensured that the decoupling point was postponed as far as possible, so that the differentiation of the product could occur at that point, allowing the greatest extent of responsiveness to consumer demand. This level would need to be assessed taking into consideration the point at which the greatest demand exists and the longest lead time the customer is prepared to tolerate. The positioning of the decoupling point would depend upon how the existing supply chain structure needs to respond to fluctuating market conditions. The level at which stock holding points exist would for instance, be significant in the context of achieving the level of push or pull required in the supply chain and at which stage of the production process, it would be stationed, i.e, at the components stage or the sub-assembling stage, the finished goods stage, distribution, retailing or end user stages.(Naylor et al, 2000:116). Based upon a one year study examining agility within the supply chain, Remko (2000) has argued that from an operational perspective, the leagility approach may well work, because lean capabilities can often be a prerequisite that can contribute towards agile performance. But in actual practice, if the leagility approach is to be implemented, it must fit within a purely agile supply chain strategy rather than a purely lean approach, therefore the extent to which these two can be combined remains a debatable issue. The author has concluded that the leagility thesis does not pose any fundamental challenge to the concept of agility in the supply chain. References - * Naylor, J. Ben, Naim, Mohammed M and Berry, Danny, 1999. “Leagility: Intregrating the lan and agile manufacturing paradigms in the total supply chain”, International Journal of Production Economics, 62: 107-118 * Remko, I. Van Hoek, 2000. “The thesis of leagility revisited”, International Journal of Agile Management Systems, 2(3): 196-201 Read More