Lean and Agile Supply Chain Strategies

4934 Words Jul 19th, 2012 20 Pages
| Lean and Agile Supply Chain Strategies | Seminar in Business Economics | | 30-03-2012 |
Table of Contents Introduction 2 Subject 2 Purpose 3 Problem Formulation 3 Definition of Concepts 4 Theory and Methodology 5 Limitations 6 Structure 6 Exploratory Analysis 7 Lean Supply Chain: Toyota Motor Corporation 7 Agile Supply Chain: Dell 9 Comparison of the Two Strategies 10 Leagile Supply Chain: Hennes & Mauritz 12 Discussion 15 Summary and Conclusion 17 List of References 19

Efficient supply chain strategy is crucial for businesses as it helps companies to achieve their most important goal – customer satisfaction. It assures that products are delivered on time, to the right
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“Leagile” or “hybrid” strategy is central to this report. As was pointed out earlier, it is not enough for a company to be just “lean” or “agile”. So the benefits, characteristics and issues of this hybrid strategy should be discussed in order to build a profile of a leagile supply chain strategy.
Definition of Concepts
The following definitions and concepts are described in context of this paper and are relevant for the subject at hand.
Lean supply chain aims to reduce and eliminate waste and non-value added activities of the supply chain. Eliminating waste refers to minimizing lead time (just-in-time approach), inventory and costs associated with operations through different methods, such as total quality management (TQM) and Six Sigma.
Agile supply chain focuses on flexibility and efficiency of responding to customer demand. It is a “wait-and-see” approach, which means that the company is not trying to forecast demand, but rather waits until demand is known and then quickly responses to it.
Decoupling point is defined as:
“…the location in the product structure or distribution network where inventory is placed to create independence between processes or entities. Selection of decoupling points is a strategic decision that determines customer lead times and inventory investment.”
Figure 2 illustrates this concept (the triangles represent decoupling points). The first row represents a completely agile supply

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