Lean and Agile in Supply Chain

In supply chain management Lean has considerably narrowed (and partly even conflicting) meaning than the comprehensive Lean thinking, which describes organization’s development system.

In supply chains and production, Agile concept describes agile manufacturing and supply chain: flexibility meets changing needs of a customer, for example, when amount of demand and mix varies strongly. When Lean term is used as opposite of Agile term, it is often referred to cost- effective production, in which material flow is steady, thin and optimized. Agile response to changes in demand needs, some buffers: either stocks or short delivery times, which in turn requires extra capacity during demand fluctuation. These cause costs. Cost-effectiveness, in turn, requires low levels of stocks, steady material flow as well as a high level of capacity utilization with steady production volumes. So, the reaction to rate demand fluctuations can be lower.