Logistics
Management
Dr. Mehdi Shamohammadi
Lean thinking and agile supply
chains
Logistics
Management
Dr. Mehdi Shamohammadi
International Business & Trade, INHA University
Agility in Supply Chains
Definition
• Agile supply chains are designed to be highly responsive to changing customer deman
ds.
• Focus shifts from company-centric operations to customer-centric strategies.
Key Example
• Li & Fung: Coordinates manufacturers across Asia to serve US brands like Levi’s.
• Organizes into customer-focused divisions, each run by entrepreneurial managers.
Agile vs. Lean Supply Chains
Aspect Lean Supply Agile Supply
Focus Efficiency & cost minimization Responsiveness & flexibility
Product Demand Stable & predictable Volatile & unpredictable
Batch Size Small to reduce waste Small to increase responsiveness
Typical Use Mature products New or fast-changing products
Order Winner Price Availability
Agile vs. Lean
Supply Chains
The comparisons in Tables 7.1 and 7.2
help us to place ‘agile’ in relation to
‘lean’, and thus to complement our
earlier concept of logistics performance
objectives.
Agile vs. Lean
Supply Chains
Agility in Supply Chains
Leagility: A Hybrid Approach (Lean + Agile = Leagility)
• Combines lean (upstream) and agile (downstream) strate
gies.
• Supports:
• Efficiency early in the supply chain
• Customization & responsiveness closer to the custo
mer
• Closely linked to postponement strategy (delaying final
customization).
Agility in Supply Chains
Strategic Insights
• Agile supply is suitable for:
• Introduction & growth phases of product life cycle
• Short-lifecycle goods (e.g., fashion, mobile phones)
• Both lean and agile aim for flow synchronization with demand
, but:
• Lean focuses on waste reduction
• Agile focuses on demand flexibility
Agility in Supply Chains
Lean + Agile = Leagility
• Not a matter of either/or: Lean and Agile can be combined strat
egically.
• Use Lean where possible to reduce waste and cost.
• Use Agile where demand is volatile—requires capacity and inve
ntory buffers
Agility in Supply Chains
Four Key Capabilities for Agility
(van Hoek et al., 2001)
1. Market Sensitivity
1. Stay close to customers
2. Use market research & feedback to detect demand shifts
2. Process Integration
1. Synchronize all processes (e.g., delivery + manufacturing)
2. Avoid time/cost/quality penalties from standalone operations
3. Network-Based Collaboration
1. Leverage a supply chain network (e.g., Li & Fung case)
2. Coordinate to meet end-customer demand collaboratively
4. Virtual Integration
1. Share real-time EPOS data
2. Replace excessive inventory with accurate demand visibility
3. Note: EPOS is still past demand, not future forecasts
Figure 7.6
Model of agile capabilities
Source: After van Hoek, et. al., 2001
Agility in Supply Chains
Agility Practices by Domain
• Product Design
• Manufacturing
• Logistics
• Supply Partnerships
Each organization may adopt a different mix based on:
• The type and intensity of change they face
• Their operational pressures
Assignment