How Do You Measure Manufacturing Agility?
I have been in this industry a while and have seen marketers, industry analysts, and media forever publishing how manufacturing needs to be more agile. What does this agile capability really mean for a manufacturer? How does a manufacturer quantify its agility level? How does it compare to others?
Let’s start off with, what does it mean to be “agile”? According to manufacturing research, agility is the ability to thrive in a competitive environment of continuous and unanticipated change and to respond quickly to rapidly changing markets driven by customer-specified products and services. This sure sounds like a ripe picture of today’s production world characterized by frequent changes in terms of high product variation, small batch sizes, high demand fluctuation, and random unexpected disturbances on the factory floor, as well as in the supply chain.
I tend to look at any change in a business as a combination of people, process, and technology. Since I refuse to use the most overused terms in business today, paradigms and transformations, it does appear that rapid resiliency and agility has become a strategic change management goal for manufacturing enterprises alongside quality and costs. Since we are referring to responsiveness to changes in the production environment, the management of manufacturing operations and execution (MOM/MES) is the focus of this document.
Let us start off with the people side of the three-legged stool. For change to occur a culture for change must exist in the organizations. We have all heard the only constant is change. Organizations can accept it or embrace it. There are also approaches to change. Is an agile or iterative change management successful in your organization or is more of a traditional waterfall approach? How empowered are users up and down throughout the organization? An agile or waterfall or even a hybrid approach are very different cultural techniques to solve the same problem while the time to valued benefits will vary depending on cultural approach. An agile organization tends to resemble a network of smaller organizational empowered units, with fewer hierarchical layers
On the technical front, Gartner recently published a research note about agile application architectures that required to be made up of microservices, composite applications, and open architecture. Together these are designed to enable quick adaptability to business changes from a technical perspective. These capabilities are based on open architectures and no-code based solutions to support agility and resiliency as their benefit. See how MTEK, the leader in no-code MES solutions is uniquely delivering on these tremendous benefits.
Coming full circle, how do we measure agility though? What metrics and KPIs are relevant, how does one measure their agility and compare to a maturity curve of some type? Is it Overall Equipment Efficiency? (OEE) based? Is it On-time and In Full shipments (OTIF)? Could it be tied to lead time percentage reductions or working capital improvements? Is it some throughput metric? Could it be tied to the number of new product introductions introduced in a year? Is it all the above?
It seems we use the term agility in a very esoteric manner, like flexibility and resiliency. HSO Consulting has an annual assessment for Manufacturers on the agility scale. It is a qualitative perception from year to year. One finding from their recent study is that most manufacturers felt they were more agile than they were pre-covid. Until chaos ensued.
Covid was an eye-opener for most of them and in 2022 their perception of their agilities was slightly lower than the year before. Besides the perception perspective, there were no definitive metrics of agility.
In a recent article in Supply Chain Management Review, IBM highlighted how they have cultivated a relentless goal of supply chain agility. They articulate an agile culture of innovation, clients need focus, and the desire to leverage technologies to deliver greater value. Besides those esoteric verbiage, they attribute a high degree of agility achievement by leveraging intelligent applications, like MES, that empowers the manufacturing floor and in turn connects to their supply chains
To develop an agile manufacturing organization with a growth mindset there appears to be a people, process, and technology alignment that must take place. People must have the data to orchestrate a growth mindset. The technology must be able to collect and provide intelligent workflows for refinement as needed, and the processes must support the data combinations to support the rapid changing conditions.
A digital production system, like the (MES/MOM) offer from MTEK and their MBrain solution, is 100 percent no-code and takes a unique approach. It is process- and method centric, meaning it captures and contextualizes data from the entire manufacturing process and creates a digital thread by default. This approach means that shop-floor users will be instantly familiar with the logic and will have the power of instant value creation at their fingertips. It means it bridges the gap between the traditional manufacturing ways-of-working with state-of-the art architecture and application capabilities – bringing agility to manufacturing organizations and allowing them to leap-frog decades of digital transformation in a matter of weeks.
What KPIs do you use to measure agility? Would appreciate the opportunity to discuss further and establish an agility metric. Contact us to discuss.