The comprehensive guide to Agile Manufacturing
Matthew Fountain, Published: October 26, 2017 - Updated: December 21, 2018 (12 min read)
The manufacturing industry is undergoing rapid change thanks to a competitive global market, massive tech disruption and higher customer expectations for speed, service, quality and price.
To remain competitive, manufacturers need to be able to turn on a dime, respond to new opportunities and threats decisively, as well as proactively pave the way for greater efficiency and agility in their operations. Among the most innovative of manufacturers, we now see shop floors that are able to react quickly and efficiently to meet such market demands. However, as we saw from the closure of Dick Smith in 2016, the consequences of sitting still while the world around you changes can be disastrous.
So how can manufacturers prepare for the future, particularly when the future is unknown?
We believe that Agile Manufacturing is providing some answers.
What is Agile Manufacturing?
Agile Manufacturing is about being able to move quickly and easily in response to changing customer demand.
Research defines agile as “the capability to survive and prosper in conditions of unpredictable change by reacting quickly and effectively to changing markets”.
Agile Manufacturing has also been described as a business-wide approach that aims to connect the organisation’s staff, customers and technology into a coordinated whole.
In short: being connected, quick and proactive means being competitive.
A closer look at why your company should consider Agile Manufacturing
There are two key reasons you should be thinking about Agile Manufacturing:
Technology, products and consumer experience have never been more interdependent. Competition is moving from all angles and at lightning speed. For example, technological advancements in industrial automation, product traceability, and recipe management impacts how consumers order and pay, and how products are designed and manufactured.
The automotive industry has seen advancements in alternative propulsion technology, 3D printing and self-driving technologies that have forced car manufacturers to transform their product and production methods. Operational agility is now central to achieving a competitive edge.
How does your plant design cater for unforeseen technological advancements?
2. Market volatility
Fluctuating product demand, labor costs, supply chain and broader market events like the 2008 financial crisis have the ability to render companies bankrupt. While preparation for such events extends beyond the plant floor, production must be able to respond when the business demands it.
What Agile Manufacturing is not (don’t get your agile and your lean mixed up!)
Agile Manufacturing and Lean Manufacturing are different in terms of implementation and focus.
While lean is about reducing costs through continuous improvement, measurement of performance and eradication of waste in the chain, agile is more focused on perpetually responding to changing customer demands quickly through flexible production design.
One source cleverly describes lean as being like a thin person and agile being like a fit person – able to react quickly with no harm.
But the two go hand-in-hand. Both lean and agile are focused on increasing business sustainability for manufacturers. Both models impact the way companies produce products and operate, and both rely on data-backed observations, a customer-centric supply chain, IT systems and open communication at all levels.
But what does it look like in practice?
Agile Manufacturing focuses on an organisation’s ability to react (suitably) to customer and market demand. Such readiness involves:
- Connecting customer service, marketers, designers and production teams – to enable instant improvements to product/s and development of new products based on feedback.
- Information and communication infrastructure that facilitates such close collaboration. This includes the integration of IT and operations systems for greater data visibility and actionable insights.
- Flexibility built into the line and product/s – which could include volume-flexible production assets, modular production design or ensuring lines are capable of product variations that may not be designed yet. This reduces startup time for product variations.
- Flexibility in production layout and process – for example SAGE’s reconfigurable ‘assembly cells’ that allow for fast changeover of different products.
- Postponing parts of production – such as producing a ‘base product’ in advance, then leaving final assembly/configuration/customisation for later, depending on the customer’s preferences.
- Developing a highly trained workforce and following industry trends – skilled people are key to being able to execute change well.
- A just-in-time production model is common – removes inventory, frees up space for production and makes low-volume customisation possible.
How can traditional manufacturers be more ‘agile’?
A McKinsey report suggests that manufacturers prepare for market volatility through a risk assessment of possible events that could affect them and then develop a response strategy to these risks.
There are two approaches here:
Pre-emptive actions, where flexibility is built into the system e.g. volume-flexible production assets
Responsive plans, in place and ready to be used in response to an event e.g. reducing the amount of shifts in slow times.
In addition, developing a reliable and highly skilled workforce is central to being able to respond. Investing in automation training, and machine and maintenance training; cross training office workers in production roles; and providing flex-time accounts for staff are some methods of achieving agility in the workforce.
Agile Manufacturing and digitisation
Whether you know it as the Internet of Things (IoT), Industry 4.0 or digital transformation, the pressure to harness the promise of digital technologies is undeniable. And it’s not all hype. Companies are gaining competitive advantage through leveraging digital technologies to improve their operations.
Such technologies enhance a company’s ability to see production problems before they occur, eliminate information silos and respond to customer demand quickly. As such, the Agile Manufacturing approach and digital technologies go hand-in-hand.
Dell Computing, for example, harnessed a new enterprise resourcing system (ERP) to integrate its seven manufacturing facilities and outsourced operations to improve reliability and reduce downtime in its most mature factory by 75 percent. Central to achieving this was an agile ERP (Microsoft Dynamic AX), which replaced 75 different operational and IT applications across all seven facilities.
This integrated platform allowed them to run the business end-to-end: from raw materials to production, through to shipping and customer service. In addition to this standardisation, Dell reduced its IT costs by 150 million and achieved a business-wide capability to react to changing market demands.
Reading resource: Q&A: The best IIoT tools and how they can help manufacturing
First steps: introduce agile thinking
"Agile Manufacturing is a combination of speed and flexibility that is difficult to achieve because it requires radical changes to traditional thinking" – Agile Manufacturing, an Overview.
No matter what type of product or production process you work in, there will always be room to start a conversation around Agile Manufacturing. Whether it be to plan for changes in production demand, or move towards building more flexibility in production – small steps to prepare for future unknowns will ensure the business, and your team, is able to respond quickly and sustain a competitive advantage.
When a machine stops, it can quickly escalate to calling in external help – sometimes unnecessarily. The Breakdown Checklist is designed to get you back online faster. It will get your team thinking about what caused the breakdown and assess the need for external advice. Download the free downtime checklist here.
SAGE Automation delivers agile, scalable and secure automation training solutions that don’t just solve current problems, they pre-empt and deter future ones, helping your organisation thrive. With years of experience working in defence, infrastructure, resources, utilities and manufacturing, SAGE has unmatched expertise standing by to upskill you or your team.