Leagility in Manufacturing and Procurement: A Conceptual Framework

Leagility in Manufacturing and Procurement: A Conceptual Framework

Sumeet Gupta (Shri Shankaracharya Institute of Technology and Management, India), Miti Garg (The Logistics Institute - Asia Pacific, Singapore), Mark Goh (The Logistics Institute - Asia Pacific, Singapore) and Maya Kumar (The Logistics Institute – Asia Pacific, Singapore)
DOI: 10.4018/978-1-60566-723-2.ch010
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Abstract

A combination of lean and agile concepts, leagility has gained ground in recent years. While it has found widespread applications in the domain of manufacturing, other domains such as procurement can also benefit from the principles of leagility. We study the application of concepts of leagility in PC manufacturing through the case of Dell and based on our experience with a worldwide retailer, we develop a conceptual framework in this paper which can be used as the basis for applying the principles of leagility in the domain of procurement. The framework would be of particular significance to academics as it extends the field of leagility to procurement. At the same time, manufacturing and retail firms can derive benefits by downsizing their inventory using the principles and conceptual framework discussed in this chapter.
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Literature Review

Lean Supply Chain Paradigm

The lean supply chain modeling approach, first introduced by Womack et al. (1990), calls for the elimination of all waste in the supply chain (Harris, 2004/05). In the lean paradigm, activities that consume resources but generate no redeeming value in the eyes of the consumer are waste that must be eliminated (Womack & Jones, 1996). The wastes can be classified into seven basic forms, namely, defects in production, overproduction, inventories, unnecessary processing, unnecessary movement of people, unnecessary transport of goods, and waiting by employees (Ohno, 1988). A lean enterprise is one that seeks out the value inherent in specific products, identifies the value stream for each product, supports the flow of value, allows the customer to extract value from the producer, and pursues perfection (Womack & Jones, 1996).

The epitome of the lean supply chain is Toyota, where manufacturing reacts to a combination of dealer orders and sales forecasts provided by Toyota Motor sales. The focus of Toyota production system (TPS) was on the reduction and elimination of waste or muda. Toyota’s manufacturing responds to the demand signal emitted by the next-stage customer who is rarely the end user. Thus, the principle behind lean enterprise is pull replenishment from the next-stage customer and not the end user. (see Figure 1)

Figure 1.

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