Agile as Risk Management Tool

Defining “Agile”

“Agile” in manufacturing describes plant responsiveness to market requirements, the ability to produce novel or established goods quickly and flexibly (Slack et al, 2004). Katayama and Bennett (2006, p. 93) define agile manufacturing as “the idea of frequently changing products and making investment in equipment to facilitate the production system’s agility”.

“Agile” in Supply Chains

“Agility is the ability of an organisation to respond rapidly to changes in demand, in terms of both volume and variety” (Christopher, 2003, p. 285).

Agile, although frequently regarded as an element of lean, is better described as its complement. Whereas lean offers tools for streamlining throughput and reducing inventory, agile suggests no specific methods for systemic improvement. Agile is more philosophy than toolkit, although to van Hoek (1998), agile is a composite concept of strategic postponement (discussed later) and variable capacity.

According to Christopher (2011), agility and responsiveness are alike, despite agility having acquired multiple interpretations and applications. Agility harnesses the advantages of leanness, is intrinsically pull oriented, and connects downstream flexibility with upstream lean processes via a decoupling point. To Christopher, SC agility is the sum of seven principles: 1. synchronization through information sharing; 2. working smarter, not harder; 3. reduced inbound lead times through supplier partnerships; 4. reduced complexity; 5. delayed configuration; 6. management of processes, not functions alone; and 7. use of performance metrics.

Agile supply networks combine standard and special methods to deliver customised goods. Product segment determines the supply strategy, as the popular term “mixed supply base approach” suggests (Towers and Bergvall-Forsberg, 2009). Fisher (1997) states that SC design depends on a product’s being either “innovational” or “functional”. In the case of textiles SCs, these terms could be swapped for “high fashion” and “classics” or “plains” respectively. In Fisher’s interpretation, agile companies prioritise market mediation over distribution efficiencies.