Business environment Essays

Business environment Essays Business environment Essay Business environment Essay Agility is the ability to thrive and prosper in an environment of constant and unpredictable change. The term agile manufacturing was coined by a US government sponsored research programme at Lehigh University and, Latterly, MIT. It is an enterprise-wide strategy in which the customer is the first priority, change is an opportunity to do things better, and delivering value is paramount. It seeks to cope with demand volatility by allowing changes to be made in an economically viable and timely manner. As the transition into the twenty-first century occurs there are radical changes taking place that are reshaping the industrial landscape of western economies. Customers want to be treated individually. The marketplace has become truly global and requires low volume, high quality, custom specific products. These products have both very short life cycles and development production lead times. Everything is changing very fast and unpredictably. The swift trend towards a multiplicity of finished products has lead many companies into problems with inventories, overheads, and efficiencies. Mass production does not apply to products where the customers require small quantities of highly customised, design-to-order products, and where additional services and value-added benefits like product upgrades and future reconfigurations are as important as the product itself. This leads to a people intensive, relationship driven operation. Perfect quality and very high levels of service are expected and required. Agility relates to the interface between the company and the market. Essentially it is a set of abilities for meeting widely varied customer requirements in terms of price, specification, quality, quantity and delivery. Agility has been expressed as having four underlying principles: delivering value to the customer; being ready for change; valuing human knowledge and skills; forming virtual partnerships. The company must remove the obstacles that prevent it from manufacturing with high velocity the set-ups, the excessive material handling, the poor physical flow, and all production interruptions. And the company must streamline the physical flow, integrate the processes and close the distances between supply, production, assembly, distribution, and the end customer. The emphasis must be on quickly satisfying the service chain of events from the time a customer delivers a request until he is satisfied. Although the word manufacturing is used with this concept, the principles of agility can equally apply to other functions of a business and to service industries. The agilitys success has attracted more than 150 Fortune-500 companies. Lean, flexible and agile in supply chain A supply chain is the process of moving goods from the customer order through the raw materials stage, supply, production, and distribution of products to the customer. Market demands, customer service, transport considerations, and pricing constraints all must be understood in order to structure the supply chain effectively Managing the supply chain for competitive advantage is not just to reduce costs. All physical and logical events within the supply chain must be enacted swiftly, accurately, and effectively. Leanness, flexibility and agility have to be utilised proactively at suppliers and their suppliers. These inter-company collaborations created can help to achieve desired economic outcomes that the individual firms can not achieve separately. Such networks allow firms to combine resources to gain economies of scale, acquire technologies and resources, gain knowledge, and enter markets beyond their individual capability. They also can help to achieve continuing gains in efficiency, labour productivity, and reduction of cycle time and inventory. Comparison of lean, flexible and agile Lean production allegedly combines the benefits of craft and mass production, without their disadvantages. It delivers quality and variety without the cost penalty of craft production and the large cost advantage of mass production. Flexibility is a feature of the companys production system. It is the inherent ability to adjust or modify its resource deployment according to new or changing demands in the market. Agility is the ability to thrive and prosper in an environment of constant and unpredictable change. Lean manufacturing is being very good at doing the things you can control. Agile manufacturing deals with the things we can NOT control. Agility is built upon the firm foundation of world class or lean manufacturing methods, coupled with an organisation that is physically, technologically, and managerial established for rapid and unpredictable change. Among the four underlying principles of agility: Delivering value to the customer, being ready for change, valuing human knowledge and skills, forming virtual partnerships, the first three can be found within the operating philosophies of companies generally thought to be lean as described in The Machine that Changed the World. To summarize this comparison, agility, flexibility and leanness are not alternatives, but are mutually supporting concepts. Together they improve competitiveness and the prospects of survival in an increasingly volatile and global business environment.