Agile Enterprise Strategy
"When change is discontinuous,
the success stories of yesterday have little relevance to the
problems of tommorow; they might even be damaging. The world
at every level, has to be reinvented to some extent"
Source: Charles Handy, Beyond Certainty, Arrow Business Books,
Most of what of the things presented as
agile practices, are in fact lean production practices. Agile
enterprise is concerned with a post lean production paradigm.
Lean production is one of yesterday's success stories, although
because ideas diffuse very slowly, many companies are still in
the process of implementing lean production. And because lean
is so popular and easy to understand, a common mistake is to
assume that lean and agile are the same. They are not.
With the emerging collapse of mass/lean
production oriented competitive conditions a need has arisen
to develop new types of enterprises capable of dealing with and
thriving in a complex and ever changing business environment
- enterprises that can continually reinvent themselves. The strategic
vision is therefore the development of enterprises totally committed
to embracing the emerging business environment. This involves
creating a strategy that moves enterprises forward in three interrelated
- The niche enterprise - develop and exploit
capabilities to thrive and prosper in the face of increasing
diversity (arising from individual customers as well as different
markets) and to deal with wider issues of a fragmenting and diverse
- The knowledge-based enterprise - develop
and exploit capabilities to use knowledge and information for
sustainable competitive advantage (in effect acknowledging information
and knowledge as a source of wealth);
- The agile (or adaptive) enterprise - develop
and exploit capabilities to thrive and prosper in a changing,
nonlinear, uncertain and unpredictable business environment.
Agile manufacturing takes its name from
the last of these three interrelated areas. However, agility
is just one component of a 21st century manufacturing enterprise
strategy - the issues of knowledge-based and niche enterprise
need to be considered and most importantly, the interrelationships
between the three elements addressed.
Many companies have moved forward in the
area of niche enterprise, using concepts and strateigies linked
to what is called mass customization (individually customised
products at mass production prices). However, many have not actively
explored the issue of knowledge enterprising although more and
more companies are starting to explore this area and to better
define and further develop the concepts. Few companies have fully
understand, let alone implemented, agile attributes (meaning
that capability to deal with change, uncertainty and unpredictability).
None have linked three elements together.
Therefore, while much is now known about how to mass customize,
very little is known about what creates agile attributes. When
companies involved in mass customization are analysed, the lack
of agility is often very apparent, since most of the mass customization
techniques assume only limited uncertainty and unpredictability
in the business environment. Agility is therefore truely a frontier
activity which challenges many of today's "best practices".
The key points to understand are:
- Agile manufacturing is a strategy aimed
at developing capabilities (the enterprise platform) to prosper
in the next century. In this respect it is similar to a manufacturing
strategy in that it should support business and marketing strategies.
However, these strategies also need to be modified to take advantage
of agile manufacturing capabilities.
- As a strategy, agile manufacturing is
concerned with objectives, structures, processes and resources
and not with individual point solutions, particular technologies,
methods, etc. considered in isolation.
- The emphasis is on designing the enterprise
as a whole so that certain characteristics are achieved and not
on piecemeal adoption of quick fixes, prescriptions and panaceas.
- Agile manufacturing may require some current
best practices, lean production concepts, technologies and taken-for-granted
assumptions to be re-evaluated, modified or even abandoned.
- In the same way that mass-production resulted
in the demise of many craft-based firms, agile manufacturing
is likely to lead to the elimination of many mass production
firms, even those with lean production enhancements.
- One of the biggest problems to overcome
is the misunderstanding that lean and agile are synonomous. They
are not, although most (as much as 99%) of what is portrayed
as agile is in fact lean.