Discussion on Agile and Lean Supply Chains

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Running head: AGILE AND LEAN
Agile and Lean
Name of the Student
Name of the University
Author’s Note:

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Table of Contents
1. Introduction............................................................................................................................2
2. Discussion..............................................................................................................................2
2.1 Discussion on Agile Supply Chain..................................................................................2
2.2 Discussion on Lean Supply Chain...................................................................................3
2.3 Comparing Agile and Lean Supply Chain.......................................................................4
3. Conclusion............................................................................................................................10
References................................................................................................................................11

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1. Introduction
A supply chain is a specific network within an organization as well as its suppliers for
producing and distributing any product to the final buyer. This particular network involves
different people, information, resources and entities (Rajesh and Ravi 2015). The supply
chain eventually represents a few steps, undertaken by them for getting the service or product
from the original state to the client. Supply chain management is the distinctive management
of the overall flow of services and goods and even involves all types of procedures, which
transform raw materials into the finalized products (Zhu and He 2017). This type of
management includes an active streamlining of different activities of supply side in the
business for the core purpose of maximization of customer values and even obtain a basic
competitive advantage within the specific market place. This report will be providing a brief
description on the differences between agile and lean supply chain.
2. Discussion
2.1 Discussion on Agile Supply Chain
The agile supply chain can be referred to as the proper utilization of distinct
responsiveness, competencies, and promptness in managing the supply chain for gaining
maximum flexibility (Luthra et al. 2017). This type of supply chain is emphasized on cost
efficiencies, productivity and speed for understanding the production or delivery of goods
and services. These agile chains are dependent on real-time data for helping to make relevant
decisions in regular operations and projected data within the supply forecasts. After proper
combination, it can easily create a more robust procedure, which is responsible for saving
businesses as well as money of the customers and even eradicate wastes of excess inventory
(Ahi and Searcy 2015). It foresees any type of potential shortage and does it quickly to ensure
high flexibility.

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The modern supply chain grows in a complicated manner, and the digitization focuses
on change and fundamentals for transforming the process of functioning supply chain
(Mehralian, Zarenezhad and Ghatari 2015). This agile supply chain majorly refers to the
overall utilization of responsiveness of daily operation. It utilizes real-time data as well as
upgraded information for leveraging current processes against demand forecasts. As a result,
it is extremely helpful in improving the overall productivity and efficiency of the respective
entity (Christopher, Harrison and van Hoek 2016). One of the most significant advantages of
the agile supply chain would be emphasizing on avoiding any type of potential shortage and
eradicating excess stocked inventory.
2.2 Discussion on Lean Supply Chain
The lean supply chain could be referred to as the distinct type of supply chain, which
can provide better customer value to fulfil customer requirements and it also facilitates the
significant operation of the lean supply chain for creating a virtuous cycle, which can
translate to the superior financial performances for each and every organization (Mishra et al.
2015). These distinct organizations, hence strive to become lean from the systematic
approach towards building as well as controlling their respective supply chains.
There are seven phases of lean supply chains, which include the development of
systems thinking, understanding customers' values, proper value stream mapping,
benchmarking the best practices, designing to manage the volatility of demands, creation of
flow and finally performance metrics (Routroy and Shankar 2015). These distinct phases are
being applied by different organizations in their lean journey for the core purpose of
incrementing the competitive advantages and profitability; hence allowing them to become
more productive as well as efficient. It is needed to be sure that the company would be
gaining maximum benefits without much complexity or issue (Balaji, Velmurugan and

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Subashree 2015). Hence, the lean supply chain could even be referred to as the most effective
and efficient type of supply chain for obtaining products from its suppliers at reduced costs.
2.3 Comparing Agile and Lean Supply Chain
Both agile and lean supply chains are incredibly significant and essential for dealing
with any type of complex situations for any particular organization (Balaji et al. 2016). These
two methodologies are extremely popular for delivering faster and more sustainable results.
Lean supply chain comprises of several traditional concepts, like production should be on the
basis of demands and not only on supplies. It is mainly regarding doing anything when the
output is much more efficient when being performed in smaller lots for the core purpose of
exploiting economies of scale (Haq and Boddu 2015). It takes time to emphasize the overall
quality for the core purpose of increasing efficiency and production.
The organizations can develop different supply chains, so they could quickly decrease
the costs and then remain highly competitive in the business landscape (Kawa and Maryniak
2018). Management of supply chain is the most significant procedure as an optimized supply
chain can result in reduced costs as well as a fast cycle of production. There exist different
kinds of the supply chains, like agile and lean. The supply chain includes few distinct steps,
such as moving and transforming the raw materials into the different finished product,
transportation of the products and then distribution of such products to their respective end
user (Gattorna 2016). These entities majorly involve producers, distribution centres,
warehouses, retailers, vendors and transportation companies.
The employers in the lean supply chain are solely responsible for defining their
working methodology, and the workers should improvise the method of working. Lean
supply chain method can easily eradicate anything that can add value (Tarafdar and Qrunfleh
2017). Proper eradication of waste refers to the elimination of unnecessary meetings, tasks as

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well as documentation and even any type of inefficient working methods like multitasking
and it also places a strong focus on the system for making the teamwork as a whole. Various
popular companies are using lean supply chain in their business, such as Toyota, Intel, Nike
and many more. Toyota had been successful in elimination of their waste and have become
successful in mastering the technique in minimization of faulty products, which do not fulfil
customer requirements. Intel, on the other hand, has adopted lean supply chain for providing
a high quality product to an industry, which demands 0 issue and also improve the profits and
gain customer satisfaction. Nike, being a popular shoe and clothing brand, has adopted lean
supply chain for gaining maximum success by reduction of waste and poor labour practices.
This agile supply chain subsequently refers to the set of principles and values (Sharma
and Shah 2015). Different aspects can be underlined in this process, such as the interaction of
different individuals on methods and tools, proper collaboration with the potential customers
within the co-operation of the project outcomes as well as respond to changes with a clear
plan. Similar to lean supply chain, several organizations have also applied agile supply chain
in their businesses. Schneider Electric is one of them that has gained efficiency and
sustainability with agile supply chain. BASF has also used agile supply chain for gaining
maximum improvement and sustainability performances.
Agile method is extremely similar to the lean supply chain, and they have several
similarities. For any organization to increase growth and maximize profit, it is important to
structure the entire SCM for dealing with issues related to fluctuations between demands and
supplies (Sarangi 2016). Lean mainly emphasizes on the production of a high volume of
products at lower costs. The main objective is to add values for the clients after the reduction
of the expenses of goods and services as well as lowering of waste. Such SCM majorly
emphasizes on predictability and reliability and not only on adaptability and flexibility.

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Production is being planned for several years and not only on adapting to the
respective changing market. Such previously planning methodology helps find the lowest
possible costs for the larger volumes of goods and services (Bicocchi et al. 2019). Moreover,
this type of lean SCM has traditionally been the most significant production form as it
emphasizes the reduction of expenses, and all the customers would like to pay less. Several
organizations are moving away from a specific lean model as the markets are changing
overnight.
The agile supply chain is being built to be extremely scalable for the distinct purpose
to have core ability for quickly getting adapted to the changing or altering situations. This
type of different methodology is eventually considered as extremely vital for the companies,
which require to be adapted to any kind unanticipated external economic changes within the
technologies as well as changes to the customers’ demands (Carvalho et al. 2017). Proper
deployment of the agile supply chain eventually enables the companies in quickly adjusting
their sales, logistics and even sourcing.
A proper decision is to be undertaken if an agile or lean supply chain strategy is
required to be adopted for the core purpose of determining the appeal of a product through
basic market research as well as the establishment of a supply chain accordingly (Frazzon et
al. 2017). The most significant supply chains subsequently come together as soon as the
businesses would take up a broad view of the market for taking into account the huge
economic factors, which might influence the customers' demands in both long and short
terms (Novotna and Vinš 2015). One of the major and the most significant differences
between agile and lean is the distinct fluidity with the response to the market. The lean supply
chain is responsible for emphasizing on the cutting of costs, by producing higher volumes of
services or product with low variability. The agile supply chain emphasizes on response to
the market demands with small and customized item batches (Chen, Liu and Oderanti 2020).

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The lean supply chain is extremely cost-effective as well as predictable; however, the agile
supply chain is highly adaptable and flexible as well as scalable.
There are some of the most distinct differences between lean concepts and agile
concepts in the supply chains. A proper understanding of this agility within the supply chains
is responsible for addressing the process of lean concepts to be applied to this agile SCM
(Jasti and Kodali 2015). For the entities of the supply chain, who have utilized or deployed
the lean concepts within this supply chain management. As a result, the respective
organization has to remove the additional expenses eventually. Moreover, the utilization of a
computerized system can automatically create the order and utilize technology for picking up
the orders, to ensure that the concepts are being left in the supply chain (Gattorna 2016). The
fallacy within this lean supply chain eventually rests on the fact that such information, which
has garnered from that the lean supply chains is not being utilized for making a quantitative
and predictive analysis of what requires to be done in the future. Hence, this supply chain has
different overstocking issues and does not comprise of the capability to deliver a perfect
visibility degree (Adebanjo, Laosirihongthong and Samaranayake 2016).
Moreover, the agile supply chain could rapidly be changing environments like trends,
customization, demands of customers and economy, apart from the other factors. After
making the supply chain, it comprises of the core capability to provide response to few
distinct issues on an immediate manner, and the entities of supply chain could easily navigate
such distinct turmoil, which might arrive and then present itself in the subsequent course of
shipping, manufacturing as well as reverse logistics SC (Routroy and Shankar 2015).
Different practices of agility allow this supply chain to alter the process of operation.
Moreover, with the utilization of a few lean concepts, this supply chain might be improvised
the working flow of the individual staff. Moreover, this type of agility enables the partners of

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the supply chain to work all together for producing the number of products, which is required
regularly (Balaji, Velmurugan and Subashree 2015).
The agile solutions are a method to take the lean and even improvise it for responding
and fostering the relationships between suppliers to the customer to the manufacturer. With
the involvement of agility, significant advantages are being provided. By proper maintenance
of agility, these entities of the supply chain could easily get adapted to the wide variety and
include difference changes (Mehralian, Zarenezhad and Ghatari 2015). It implies that the
supply chain might not be capable of producing a higher capacity of goods and services when
any materials are eventually available. Hence, these distinct entities have found out different
ways of getting a proper customized result for every order. The existence of supply chain
ensures that the best products are being provided to the customer with the help of agility in
the business (Christopher, Harrison and van Hoek 2016). The acute point within this agile
supply chain might go back for breaking down the organizational silo as well as distinct rigid
structures for meeting the particular demands locally.
Agility within the supply chains is hugely altering the process of supply chain entities
operating. However, the providers and executives of SCM require to understand the process
of lean and agility concepts working together for producing a more efficient and demand-
driven supply chain (Routroy and Shankar 2015). A failure in the employment of both lean
and agile supply chains can eventually result in significant delays for the given supply chain
entity. All the distinct factors within an agile supply chain can bring out significant
implications regarding the future trends of products and services (Haq and Boddu 2015). The
interlinked and interconnected channels and networks eventually combine within the
provision of services and products needed by the end customers within a specific supply
chain. It is the subsequent designing, planning, and execution, controlling or monitoring of
supply chain activities with the distinct goal to create net value as well as building a

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competitive infrastructure (Kawa and Maryniak 2018). Proper synchronization of supply with
high demands and measurement of performance globally is being considered in this SCM.
Hence, it could be stated that the lean SCM is for reduction of costs and also lowering
wastes as much as possible and it is important for different organizations with the higher
volumes of purchase order, as the costs or wastes can be collected quickly (Tarafdar and
Qrunfleh 2017). The organizations with a higher amount of lower variability purchase orders
would provide an advantage to their business efficiency. However, an agile supply chain is
being built for being extremely flexible to have the capability to get adapted to the changing
situations eventually. The agile supply chain is ultimately considered vital for the companies,
which want to be able to get adapted to the unanticipated external economic changes (Sharma
and Shah 2015). The proper deployment of an agile supply chain can enable the businesses to
help them in better execution of processes and activities.
Figure 1: Agile vs Lean Supply Chain
(Source: Novotna and Vinš 2015)
The logistics environment for the agile supply chain has the contention for any type of
turbulent markets, which change unpredictability or rapidly and is highly fragmented niche
markets and not of mas markets for gaining shorter product life cycles (Carvalho et al. 2017).

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It even grows significant demands for mass customization and the delivery of completed
solutions to different clients for compromising services and products. These distinct above
mentioned aspects are being achieved in the agile supply chain within fewer costs and also
with significant responsiveness (Chen, Liu and Oderanti 2020). Agility is not related to
leanness, and this lean is majorly being utilized in connection with lean manufacturing for the
core purpose of implying a proper and effective approach towards the business.
Several organizations, which have adopted lean method as the business practice for
thir supply chain (Adebanjo, Laosirihongthong and Samaranayake 2016). Several issues take
place, as soon as the global logistics strategies are being devised, and a significant concern
arises while determining the degree of centralized direction against the local economy of the
organization. The organizations have preferred to undertake decision-making process to a
specific regional level. Significant changes are to be considered in the high levels of
responsiveness. The major driver for such distinct moves are termed as low labour costs and
the other companies are utilizing low-cost sources of supply for successful manufacturing the
products, in which there is a predictable demand for utilization of more flexible and local
facilities to produce more volatile and less predictable products (Balaji, Velmurugan and
Subashree 2015). In structuring cost-effective as well as agile global supply chains,
significant value creation might take place.
3. Conclusion
Therefore, from the above discussion, a conclusion can be drawn that SCM involves
the storage and association of different raw materials for work in the process inventory as
well as for the finished good from the origin point to the consumption point. Different types
of supply chains are present, and amongst them, the most significant examples are agile and
lean supply chains. An agile supply chain is a system of te product distribution concerned

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with doing different things promptly for saving costs and hence being highly responsive to
the market demands for the maintenance of flexibility or scalability and keeping high
productivity. However, the lean supply chain refers to the process of a well-designed supply
chain that operates for delivering different products to the end customers with lesser wastes.
This particular supply chain is a significant enabler for a company, which strives in becoming
extraordinarily efficient and lean. The above-provided report has described a distinct
comparison within the agile and lean supply chain with relevant details.

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