|
AGILE MANUFACTURING: A STRATEGY
FOR THE 21st CENTURY
Paul T. Kidd
Cheshire Henbury, Tamworth
House, PO Box 103, Macclesfield, SK11 8UW, United Kingdom. Phone:
+44 (0)1625 619313; Fax: +44 (0)1625 619060; Email: paulkidd@cheshirehenbury.com;
WebSite: http:///www.cheshirehenbury.com
Introduction
Manufacturing industry in the
United States may well be on the verge of a major paradigm shift.
This shift is likely to take US industry away from mass production,
way beyond lean production, into a world of Agile Manufacturing.
Agile Manufacturing, however, is a relatively new term, one which
was first introduced with the publication in the USA of a report
entitled 21st Century Manufacturing Enterprise Strategy (Iacocca
Institute 1991).
At this point in time, Agile
Manufacturing is not fully understood in the industrial and academic
worlds, and the conceptual aspects are still being defined. However,
one thing is certain - Agile Manufacturing represents a significant
attempt on the part of US industry to respond to the threat posed
by the newly industrialised nations around the Pacific Rim. The
aim is not to close the competitive gap that has been allowed
to develop, but to outperform overseas competition by achieving
quantum leaps forward in performance and capabilities. Agile
Manufacturing is not about small scale continuous improvements!
US manufacturing industry is seeking to regain the pre-eminence
that it once enjoyed prior to the emergence of Japan as a major
industrial nation.
European manufacturing companies
need to respond, both to the threat from the so-called Asian
Tigers, but also to this major movement to revitalise US manufacturing
industry. There is always a tendency to view new ideas from the
USA such as Agile Manufacturing as fads - another programme of
the month. Such a response would be foolish. Agile Manufacturing
is not like total quality management or business process reengineering.
Agility is fundamentally about a different way of doing business,
and put quite simply:
if you don't do
business the Agile way, then ultimately you won't do any business
at all!
What is This Thing Called Agility?
Concern about the decline of
US manufacturing industry and loss of competitiveness was well
reported and documented during the late 1980s (eg Cohen and Zysman
1987, Hayes, Wheelwright and Clark 1988, Dertouzos, Lester and
Solow 1989). In 1990 the US Congress decided that some action
was required and consequently the Congress instructed the Department
of Defense (DoD) to create an inter-agency task force to look
at US manufacturing with the objective of making it more competitive.
Academics at Lehigh University in Bethlehem, PA, were asked by
the DoD to work with industry to develop a vision of what a successful
industrial base would look like and to develop a framework and
recommendations to make that vision a reality.
Industry personnel worked on
this vision and the recommendations, and in the fall of 1991
a two volume report of their conclusions, entitled 21st Century
Manufacturing Enterprise Strategy (1991), was published by the
Iacocca Institute at Lehigh University. It was during this time
that the term "Agile" was coined.
Agility has been defined in
several ways. Here are four examples:
"Agility is
dynamic, context specific, aggressively change embracing, and
growth oriented. It is not about improving efficiency, cutting
costs, or battening down the business hatches to ride out fearsome
competitive storms. It is about succeeding and about winning
profits, market share and customers in the very centre of competitive
storms that many companies now fear."
(Goldman, Nagel and Preiss,
1995)
"Agility is
the ability to thrive and prosper in a competitive environment
of continuous and unanticipated change, to respond quickly to
rapidly changing markets driven by customer-based valuing of
products and services. It is the coming business system that
will replace the mass production businesses of today."
(US Agility Forum Literature)
"Agility is
a capability; it is an organization's capacity to respond rapidly
and effectively to unanticipated opportunities and to proactively
develop solutions for potential needs. It is the result of an
organization and the people who comprise it working together
in ways which benefit the individual, the organization, and their
customers."
(Nelson and Harvey 1995)
"Being Agile
means being proficient at change - and allows an organization
to do anything it wants to do whenever it wants to."
(Dove 1994)
These four definitions define
Agility in terms of outcomes and thus they are not too specific
about what Agility is or how it can be operationalized. Lets
get more specific!
"The concept
of Agile Manufacturing is built around the synthesis of a number
of enterprises that each have some core skills or competencies
which they bring to a joint venturing operation, which is based
on using each partners facilities and resources. For this reason,
these joint venture enterprises are called virtual corporations,
because they do not own significant capital resources of their
own. This helps to make them Agile, as they can be formed and
changed very rapidly."
(Kidd 1994)
"An Agile corporation
is a fast moving, adaptable and robust business enterprise capable
of rapid reconfiguration in response to market opportunities.
Such a corporation is founded on appropriate processes and structures
and the integration of technology, organization and people into
a coordinated system in order to achieve a quantum leap forward
in competitive performance by delivering capabilities that surpass
those obtained from current enterprise practices."
(Kidd 1995)
"The Agility
that arises can be used for competitive advantage, by being able
to respond rapidly to changes occurring in the market environment
and through the ability to use and exploit a fundamental resource
- knowledge. People need to be brought together, in dynamic teams
formed around clearly defined market opportunities, so that it
becomes possible to lever one another's knowledge. Through this
process is sought the transformation of knowledge into new products
and services."
(Kidd 1994)
Some of the key words and phrases
linked with the agile paradigm are:
- Fast - a very high speed of
response, for example, to new market opportunities.
- Adaptable - the capability
to change direction with ease, for example, to enter completely
new markets or product areas.
- Robust - avoiding and withstanding
variations and disturbances, for example, products that lose
market appeal owing to changes in customer preferences.
- Virtual corporations - the
combining of talents between companies through (short term) joint
ventures.
- Reconfiguration - the ability
to very quickly reconfigure corporate structures, facilities,
people, organization and technology to meet (often) unexpected
and (probably) short lived market opportunities.
- Dynamic teaming - actively
looking for and building off the creative and innovative talents
of other team members.
- Transformation of knowledge
- explicitly transforming raw ideas into a range of capabilities
which are then embodied in both products and services.
The main points about Agility
are:
- Agility is about the basis
of competition, business practices, and corporate structures
in the 21st century.
- Agility is not about developing
more technology, although technology will play an important role.
- Agility is not another way
of referring to leanness, flexibility, computer integrated enterprises,
or other current buzzwords.
- Agility is a strategic response,
not tactical, and involves building defense against primary competitive
forces through cooperation.
- Agility is a holistic concept.
- Agility is primarily about
adaptability which is achieved through reconfiguration capability.
- Processes, structures, organization,
people, implementation capabilities, etc are the key issues.
- Agility is a paradigm shift.
- Agility is a step change innovation
not an incremental innovation.
- Agility holds the promise
of a world based on cooperation.
Current Situation
In the USA, Agility has been
a topical subject for the past few years. Of course, because
it is so topical everything gets labelled or relabelled as Agile,
and confusion results - so figuring out what Agility really means
is no easy task, but it is getting easier as the concepts are
worked through and the language develops.
Agility has high level support
in the US - it is backed by the President and the National Centre
for Manufacturing Sciences is actively engaged in supporting
the development of concepts, methods, tools and their transfer
to US industry.
Agility is also no longer viewed
as a topic solely for manufacturing industry - Agility is now
perceived as a way of competing and is therefore relevant to
all types of businesses. Agility is also now accepted by more
and more corporations as the way forward. It is not clear how
many firms really understand the implications of Agility, but
this is what makes for winners and losers - the winners will
be the ones that can figure out what the implications are, successfully
implement changes and make Agility an everyday business reality.
Easily accessed information
about Agility is still restricted to a few publications. The
main sources of information are the following: 21st Century Manufacturing
Enterprise Strategy (Iacocca Institute 1991); Agile Manufacturing:
Forging New Frontiers (Kidd 1994); Agile Corporations: Business
Enterprises in the 21st Century - An Executive Guide (Kidd 1995);
and Agile Competition and Virtual Organizations: Strategies for
Enriching Customers (Goldman, Nagel and Preiss 1995).
In Europe Agility is still
a relatively new concept and detailed knowledge still resides
in the minds of a small handful of individuals. There is also
an inclination in Europe to mix up Agile and lean manufacturing
and to use the terms as though they were synonymous (which of
course they are not). Europeans also tend to view Agility as
a reactive requirement derived from a need to respond to external
changes (Department of Trade and Industry 1995), rather than
a proactive strategy based on changing the rules of competition.
Germany is probably the European
country that is most aware of Agility and which has taken the
greatest interest. Elsewhere, typical responses have been negative
(another American fad!), which partly reflects the difficulty
of getting new ideas accepted, partly indicates a low level of
awareness of the serious threat to European industry, and perhaps
partly also indicates a degree of anti-Americanism.
In Europe at the present time
the major need is to provide industry with:
- information to increase and
deepen awareness of concepts and the threats and opportunities
possed by the emergence of Agile competition, and
- support to operationalize
concepts and to mold these concepts into change strategies.
To meet this need a European
Agility Forum has been launched as an information dissemination
activity focused primarily on helping organizations make Agility
a business success. The European Agility Forum will undertake
to:
- track international developments
in the field and transfer this information to European industry;
- translate abstract concepts
in the Agility field into terms that industrial executives and
managers can easily understand;
- provide introductory awareness
courses to enable industry to develop and deepen understanding
and to rapidly move through the leaning curve towards operationalization
and implementation;
- document methods and tools
that will help industry implement Agility.
Concluding Remark
To conclude, Agility offers
great potential for business growth. However, firms cannot afford
to wait around to see if Agility takes off or wait to learn from
others' mistakes. Furthermore, there is no room here for scepticism
and negative attitudes. A positive response is called for - attitude
is a little thing that makes a big difference! No doubt, some
aspects of the Agility vision may not come to fruition - who
can tell? Better to put aside reservations and to actively and
positively engage in shaping the future, than to sit on the side
lines watching what is happening, or even worse, wondering what
is happening.
References
Cohen, S.S. and Zysman, J.
(1987). Manufacturing Matters: The Myth of the Post-Industrial
Economy. Basic Books.
Department of Trade and Industry
(1995). Factory for the Future - Synopsis of Final Report (Eureka
Project - Factory EU 1005). Department of Trade and Industry.
Dertouzos, M.L., Lester, R.K.
and Solow, R.M. (1989). Made in America: Regaining the Productive
Edge. MIT Press.
Dove, R. (1994). The Meaning
of Life and the Meaning of Agile. Production Magazine, November.
Goldman, S.L., Nagel, R.N.
and Preiss K. (1995). Agile Competitors and Virtual Organizations:
Strategies for Enriching the Customer. Van Nostrand Reinhold.
Hayes, R.H., Wheelwright, S.C.
and Clark, K.B. (1988). Dynamic Manufacturing: Creating the Learning
Organization. Free Press.
Iacocca Institute (1991). 21st
Century Manufacturing Enterprise Strategy. An Industry-Led View.
Volumes 1 & 2. Iacocca Institute, Bethlehem, PA.
Kidd, P.T. (1994). Agile Manufacturing:
Forging New Frontiers. Addison-Wesley.
Kidd, P.T. (1995). Agile Corporations:
Business Enterprises in the 21st Century - An Executive Guide.
Cheshire Henbury.
Nelson, A. and Harvey, F.A.
(1995). Technologies for Training and Supporting Your Agile Workforce.
In: Creating the Agile Organization: Models, Metrics and Pilots.
Proceedings 4th Agility Forum Annual Conference. Agility Forum,
Bethlehem, PA. |
