Chapter 9

The Evolutionary Constructs of Flexibility, Agility, and Lean

Linguistic confusion often arises when multiple terms may refer to the same idea or construct. Terms sometimes possess subtle nuances making it difficult to differentiate among them. For example, a single term may ambiguously refer to more than one idea or construct, or linguistic confusion may simply arise, given evolutionary change attributable to acquired learning. This observation can be made today with respect to the management philosophies, constructs, or paradigms of “flexibility,” “agility,” and “lean.”

Numerous manuscripts explaining and contrasting as well as extolling the virtues of attaining these constructs have appeared for more than 40 years. Authors have praised the virtues of each of these three constructs and painstakingly attempted to explain the nuances that differentiate the three. Yet confusion exists within each of these constructs, let alone among the three. The literature on the flexibility construct alone clearly identifies it as a complex, multidimensional, and hard-to-capture idea.¹

Many different terms for various types of flexibilities are referenced in the literature. At times, several terms are used to refer to the same type of flexibility. And, at times, terms are not always clear and precise or even in agreement. The literature regarding agility has often suggested it is different from flexibility and lean on the basis of whether environmental uncertainties are anticipated or unanticipated.

Each of the three constructs is complex and multidimensional. Taken as a whole, the preponderance of the research for the three constructs suggests there are differences among them; yet there exists confusion and inconsistency associated with their use, which leads to difficulty differentiating among them. This confusion among the constructs exists for several reasons. First, authors often examine these constructs solely in a pairwise manner. Second, these constructs are typically examined in an evolutionary manner. Agility has often been compared to its predecessor flexibility, and efforts often attempt to differentiate it from flexibility on the simple basis of an external versus internal system viewpoint. Similarly, lean is often compared to its predecessor agility, and efforts often attempt to differentiate it from agility on the basis of a philosophical or systems point of view. Third, some research utilizes empirical testing of inexact and imprecise concepts leading to slightly different aspects of the same underlying construct being masked only by different terminology. For instance, survey results from a 1986 study of 214 Japanese manufacturers suggests investments including “the introduction of flexible manufacturing systems, the reduction of the lead times in production, the development of new processes for new products, the reduction of set-up times and giving workers a broader range of tasks all point in the same direction: flexibility.”* Interestingly, these investments are often cited as enablers in the subsequent agile and lean bodies of literature. For instance, it is observed that the “flexibility to respond quickly to customer needs is a hallmark of lean manufacturing.”†

If theory and empirical work are to continue to advance in this area, semantic differences among the three constructs must be identified and resolved. Although many would suggest there is presently a preferred conceptual definition of each, to some, the explanation for each of these differing terms seem to possess the same meaning, given the wealth of alternative enablers or simply the system reference point (e.g., internal or external system perspectives) that have been used in the literature. This may possibly be attributed to the observation of the approach often taken in each investigative study of contrasting these constructs only in a pairwise manner making it difficult to triangulate among the three.

Although a conceptual definition for each of these three terms has been largely agreed upon in the literature, understanding the difference among the three is still tenuous at best. In part, this may be attributed to a number of alternative enablers or simply the system reference point. Further compounding this difficulty of discerning differences among the three is the dearth of evidence regarding the efficacy of agility.

Comprehensive literature reviews exist for each one of the constructs. However, there is an absence of a comparative review of the literature that assists one’s effort to differentiate among the three constructs. This chapter provides a comprehensive, yet sufficiently concise summary review of the literature for the three constructs, flexibility, agility, and lean. In doing so, it lays the foundation to define each term and delineate differences among the three terms so that semantic confusion among them may be dispelled. Seminal works for each construct using a historical evolutionary perspective to trace construct development, principal components, and enablers, as well as differences among the three are identified. In doing so, this chapter offers the following contributions. First, it begins with a concise review of seminal literature for each construct. There is a chronological overlap in the development of this literature. However, one could argue these three constructs appeared chronologically as flexibility, agility, followed by lean. This ordered appearance is used for the discussion in the following text. Noted in this review are the cited principal enablers as well as an explanation of the differences among the three constructs. There are distinct differences among these three paradigms, albeit these differences are subtle, which has led to the linguistic confusion and inconsistency among the three. The single, most important conclusion among the three constructs is how the later constructs of agility and lean have expanded upon and enveloped flexibility. The three constructs of flexibility, agility, and lean actually represent an evolutionary path of continuous improvement. This chapter attempts to address the confusion and inconsistency associated with “flexibility,” ‘‘agility,’’ and “lean” as transformation process constructs.

In order to better to understand these three constructs, a modified framework for them is borrowed from Gerwin.² This framework is used to unify as well as differentiate the literature for each of the three constructs. This framework is depicted in Figure 9.1 with the modified differences depicted in bold print.

Figure 9.1 Flexibility, agility, and lean conceptual framework

The framework depicted in Figure 9.1 adapts Gerwin’s framework to include all three constructs in four ways. First, a box labeled “Organizational objectives and strategies” is added. This addition is necessary, as each construct does not solely apply within manufacturing industries. Further, each construct may derive strategies or practices from both organizational objectives as well as functional (transformation) objectives. Second, the box titled “Environmental uncertainties” has been modified to recognize the source, which may be either internal (e.g., machine breakdown) or external (e.g., technological change) to the organization. Third, an arrow emanating from “Internal and external environmental uncertainties” and terminating at “Organizational objectives and strategies” is added. This arrow is necessary, as environmental uncertainties may alter an organization’s objectives, or more directly, environmental uncertainties may alter transformational objectives. Fourth, the term “Transformation” is used to replace “Manufacturing,” as flexibility, agility, and lean refer equally well to both service and manufacturing systems.

Flexibility

An early working definition of flexibility is the “ability to respond effectively to changing circumstances.”‡ The construct of flexibility, as it is understood today, began to emerge in the late 1970s. Flexibility may be defined for various organizational levels, including a level as small as a machine or as large as the entire transformation process.³ This is one issue, which partially explains linguistic confusion among the flexibility, agility, and lean constructs as each is applied at various levels by differing authors.

One author identifies seven alternative types of flexibility, including process (ability to produce a variety of existing products), product (ability to add new or subtract old products), product customization, routing, process volume, material, and sequencing flexibility.⁴ The author suggests these flexibility types are important due to both internal and external system uncertainties. As one would expect, these flexibility types can be operationalized with tactics such as the ability for substituting materials, the number of components of processes each machine can accommodate, periodic volume or sequence change accommodations, workforce or equipment capabilities, and so on. The author also postulates that the capability to augment flexibility is enabled by technology.

Flexibility of a transformation process was promoted in large part for three reasons: (1) technological advancement, (2) a desire to enhance capabilities beyond cost and productivity objectives, and (3) an unstable and unpredictable business environment.⁵ This author observes that technological evolution leading to flexible manufacturing systems and robotics has significantly enhanced production equipment capabilities, enabling the promotion of flexibility (as well as traditional objectives of reduced cost and greater productivity) as a desirable operational attribute. The author suggests that the instability and unpredictability of the environment have prompted this incentive for transformation processes to adapt.

Another author noted that flexibility refers to volume and product mix changes as well as the ability to accommodate customers’ special requests.⁶ This author observed that the strategic manufacturing decisions comprise a collective pattern of decisions, including decisions regarding capacities, facilities, technologies, and workforce capabilities. These four transformation components are often cited in later literature as enablers of flexibility, agility, and lean.

A 1986 survey of more than 500 global manufacturing corporations observed planning differences regarding the recent strategic importance of costs, quality, speed, and flexibility over the prior four-year history.⁷ Japanese manufacturers were seen to have focused on cost-efficient flexibility as their priority and were further down the road regarding flexibility as a transformation objective. European manufacturers focused upon cost pressures with large investments in technology, automation, and production and inventory control systems. North American manufacturers focused primarily on quality, with flexibility not yet being a major competitive priority. Further, these authors suggest that manufacturing has to have a minimum level of quality, dependability, and cost efficiency in order to become flexible. These authors suggest the “Japanese paradigm considers quality, dependability, cost and flexibility as priorities which a firm addresses sequentially over time, rather than as alternative points of emphasis.”§

In another publication,⁸ it is noted that “the Japanese are ahead in recognizing the growing salience of flexibility.”¶ The author suggests that the Japanese began to focus on flexibility as a strategic objective after overcoming quality issues. Like several earlier publications, it is observed that flexibility is normally considered as a means to adapt to environmental uncertainty. This author identifies means for achieving adaptation including small setup times, part standardization, and technology investments. This may represent the first instance of the evolutionary path emergence of flexibility, agility, and lean as constructs, as these strategies are also enablers often cited of agility and lean. Interestingly, the author also observes that some means for achieving agility lead to “waste.” Some of the noted examples include investments in excess capacity and floor space, slack time, as well as routing flexibility, which may discourage machine downtime reduction efforts.

A more recent review of the flexibility literature notes that flexibility “reflects the ability of firms to respond to changes in their customers’ needs, as well as to unanticipated changes stemming from competitive pressures.”** These authors suggest that flexibility offers the ability to respond to unanticipated external forces.⁹ It is noteworthy to observe at this point that the body of agile literature (discussed in the following sections) argues that the principal difference between agility and lean is simply that agility offers the ability to respond to unanticipated external forces, while lean does not.

Table 9.1 Flexibility drivers (facilitators) and source characteristics

Flexibility driver (facilitator)	Source characteristic
	Internal resources	External driver
Automation: provided by computerization of technologies	√
Delivery: ability to respond to delivery change requests		√
Expansion: ease of altering capacity	√
Labor: range of operator capabilities	√
Machine: range of machine capabilities	√
Market: ability to adapt to external changes		√
Material handling: range of materials handling parts capabilities	√
New design: new product introduction ease	√
Operations: range of alternative processing capabilities	√
Process: range of alternative parts processing capabilities	√
Product: ease of introducing new parts	√
Production: range of production parts	√
Program: unattended system function time	√
Routing: alternative path processing capabilities	√
Volume: range of profitable system volume output	√

These authors further observe that flexibility does not refer to a single decision variable, but rather to a general class of variables. Fifteen drivers (facilitators), or variable classes of flexibility, are identified, built upon earlier authors’ contributions.¹⁰ These 15 classes have one of two source characteristics, which spur a firm to achieve flexibility: (1) internal, based upon a specific resource capability or a collection of system attributes attributable to various unspecified resources, or (2) based upon an external source. These flexibility drivers coupled with a short description are noted in Table 9.1. It is noteworthy that only 2 of these 15 classes have an external source characteristic.

Agility

The construct or “paradigm” of agility was first described in 1991 by a group of researchers at Lehigh University’s Iacocca Institute.¹¹ Their report led to an early working definition of agile: the ability to meet changing marketplace needs quickly. The Iacocca Institute report subsequently encouraged several authors to promote agile as a new, evolving paradigm.

An early pioneering work resulting from the 1991 Iacocca Institute report suggests that incremental improvement of the currently existing mass production system was no longer able to provide American manufacturing with a competitive dominance.¹² Subsequently, numerous authors largely agree that the principal motivator of agility as a paradigm has been marketplace turbulence, an external systematic source of uncertainty requiring organizations to develop an inherent ability to continuously adapt.¹³

The agile body of literature cites numerous external drivers attributable to the agile paradigm emergence, including, but not limited to, ­rapidly changing customer demands, competitive challenges, technological and communications development, as well as cultural and social change. A simplified summary of the principal drivers for agile development noted in the earliest agile manuscripts are shown in Table 9.2. It is interesting to note that one manuscript identifies the principal driving force behind agility as simply the need for change.¹⁴

Table 9.2 Commonly noted agile development drivers

Agile driver	Kidd (1994)	Kumar and Motwani (1995)	Fliedner and Vokurka (1997)	Gunasekaran (1998)	Yusuf, Sarhadi, and Gunasekaran (1999)	Sharp, Irani, and Desai (1999)
Marketplace requests for mass customization			√
Supply chain stakeholders’ perceived value of information enrichment and partnerships			√	√	√	√
Information technology (e.g., the ability to provide real-time information operationally to the factory floor, internally across transformative functions, and externally across supply chains)	√	√	√	√	√	√
The ability for technology to enhance innovation, product design, and development	√	√	√	√	√	√
Competitor-driven responses (e.g., capabilities such as quality, flexibility, fast response times, and lower costs)	√	√	√	√	√	√
Social and cultural change (e.g., responsiveness to social and environmental issues)					√	√
Human resource (team-based) investments (e.g., skills, welfare, decentralized authority)	√	√	√	√		√

Since its emergence in the literature, various discipline-specific manuscripts have promoted agility as an important emerging business paradigm. One interesting observation of the agile body of literature is its multidisciplinary nature. From an evolutionary point of view, authors initially examined agility from a manufacturing perspective. This was followed by contributions examining agility from engineering, software development, supply chain management, marketing, and, most recently, project management perspectives. Taken as a whole, since approximately 1990, this body of work has synthesized common drivers and strategies for achieving agility across these various areas. The multidisciplinary nature of this body of literature clearly represents a key criterion for judging the merits of agility.

Agile Manufacturing Literature

Possibly the first reference to agile manufacturing occurred in 1991 as an outcome of Lehigh University’s Iacocca Institute study.¹⁵ From what is possibly the earliest use of the term agility as a business paradigm, the participants focused on the different capabilities of agility and flexibility in manufacturing applications. They suggest agility requires strategies, which integrate flexible technologies of production with the skill base of a knowledgeable workforce and with flexible management structures that stimulate cooperative initiatives within and between firms. The participants observe that the agile manufacturing enterprise is capable of designing, developing, and producing new products quickly as well as assimilating field experience and technological innovation easily into existing products. An important aspect of these participants’ definition of agility is the inclusion of flexibility. This may represent flexibility in product offerings (e.g., product mix or specification changes), process capabilities (e.g., quick machine changeover or mixed scheduling), or volume changes (e.g., varying output levels) in order to respond quickly to varying marketplace demands.

Using Kuhn’s model of paradigmatic change,†† agile manufacturing is suggested to be an emerging paradigm.¹⁶ This author attempts to draw connections between agile manufacturing and previous production paradigms of craft and mass production. A staged model representing an evolutionary path toward achieving agility is suggested through various mechanisms including business process reengineering or redesign and business network redesign.

An early definition of agility is the capability of operating profitably in a competitive environment of continually, and unpredictably, changing customer opportunities.¹⁷ These authors elaborate extensively upon this definition and expand upon the earlier explanations of agility by noting that the key difference between agility and flexibility is the ability to respond quickly to unanticipated marketplace changes. In their elaboration, these authors also note that the journey to agility is never completed due to an ever-changing marketplace.

An early exploration observed that agility should be considered from a systematic viewpoint.¹⁸ The author suggests agility is attained through distinctive core capabilities (e.g., diverse technologies) possessed by contributing partners, which enable rapid adaptation. The author suggests the emphasis is on leveraging the skills and knowledge of people in combined (supply chain) organizations.

An agility index, derived from 21 influencing factors, was developed in 1995.¹⁹ Two of the influencing factors commonly cited in subsequent literature include information technologies and organizational or human resource factors.

A 1997 study defined agility as the ability to successfully market low-cost, high-quality products with short lead times and in varying volumes that provide enhanced customer value through customization capabilities.²⁰ These authors note this ability must be able to respond to changes in market demands, regardless of the source. Namely, agile firms manage change as a matter of routine.

In approximately 1998, the body of agile manufacturing literature began to focus on the difference between agility and flexibility. One study differentiates agility from flexibility by noting that flexible changes are responses to known situations where the procedures are already in place to manage the change.²¹ These authors suggest that agility extends the capability of flexibility by requiring the ability to respond to unpredictable changes in market or customer demands.

Also in approximately 1998, the body of agile manufacturing literature began to focus on the difference between agility and lean. Four dimensions are used to define the agile manufacturing enterprise: (1) value-­based pricing strategies that enrich the customer, (2) cooperation that enhances competitiveness, (3) organizational mastery of change and uncertainty, and (4) investments that leverage the impact of people and information.²² The author asserts that agile and lean are not synonymous. However, only an example of supplier relationship differences used to distinguish between the two is provided. The contribution of this manuscript lies with its identification of agile enablers and the conceptual model illustrating the enabling strategies.

A 1999 study suggests differences between agility and lean.²³ These authors note that agile firms must be lean and flexible and have the ability to respond quickly to changing situations. These authors also add that despite having these abilities, agile firms will not likely possess all of the necessary resources and will increasingly need to rely upon supply chain partners. A theoretical model, built upon the drivers of Table 9.2, consisting of 10 key agile enablers is offered: (1) core competencies, (2) virtual enterprises, (3) rapid prototyping, (4) concurrent engineering, (5) multiskilled workforce, (6) continuous improvement commitment, (7) teamwork, (8) change and risk management, (9) information technology, and (10) employee empowerment. Although these authors strongly suggest significant differences exist between agile and lean, they observe that “there are no simple metrics or indices currently available” to explain agility or how it can be measured.‡‡

An observation made in 1999 notes that agile manufacturing has sometimes been confused with flexibility and lean manufacturing.²⁴ These authors note that agile manufacturing goes “beyond” the ­latter two “thought schools of manufacturing management” of flexibility and lean. These authors suggest that agility comprises two main factors: (1) responding to change, either anticipated or unexpected and (2) exploiting changes as opportunities. A large survey of (1) electrical and electronics, (2) aerospace, and (3) vehicle parts manufacturing was conducted. Although varying by industry, their findings suggest that (1) environmental disturbances are a key agility driver, (2) a customer focus is consistently important across all three industries, (3) information systems and technology are major differentiators of agile systems compared to traditional systems, (4) organization and personnel are keys to success, (5) customization capabilities is an emerging differentiator, and (6) virtual organizations, mass customization, and Internet capabilities are not as important as expected.

Building upon predecessors’ research noted in the preceding text, a more contemporary definition of agility and identification of agile ­drivers was promoted in 1999.²⁵ The collective insights of the agile body of ­literature were extended to identify 10 decision domains comprising 32 attributes of agile organizations that should be explored in future research. The 10 decision domains identified leading to agility included (1) integration of enterprise information capabilities, (2) intraorganizational and interorganizational supply chain competencies, (3) the team-building nature of empowering employees, (4) technology, (5) quality, (6) receptiveness to change, (7) effective partnerships, (8) market focus, (9) employee investments, and (10) employee welfare.

A framework proposed in 2007 for agile implementation comprised seven agile capabilities.²⁶ Utilizing a taxonomical approach based upon cluster analysis, three distinct types of agile strategies, “quick, responsive, and proactive players” were identified in various U.K. manufacturing sectors. Factor analysis and canonical discriminant analysis were used to investigate the differences among the underlying dimensions of these three groupings. The “quick” participants were characterized as possessing a significant customer focus. The “responsive” participants were characterized as emphasizing responsiveness to change and a flexible, reactive approach to dealing with change. The “proactive” participants emphasized a proactive and partnering approach to environmental threats and opportunities.

The most comprehensive definition of agility, given its multidisciplinary nature was offered in 2009.²⁷ Defined in the context of information system development, agility is the “continual readiness . . . to rapidly or inherently create change, proactively or reactively embrace change, and learn from change while contributing to perceived customer value (economy, quality, simplicity), through its collective components and relationships with its environment.” The author constructs this definition from agile manufacturing, engineering, software development, and marketing literature. The various definitions proposed over the years are rationalized to all business disciplines. Further, the author suggests there are two distinguishing differences between agility and lean: (1) Agility is better able to cope with variability while lean is not, and (2) agility promotes fast learning while lean does not.

One of the most startling observations to be gleaned from all of the agile literature is that to date, there exists little, if any, research that verifies the efficacy of these agile manufacturing strategies. The vast amount of research identifying agile drivers, concepts, and strategies (enablers) underscores the implied importance of agility. However, there is little if any empirical evidence documenting the value of these agile strategies. Most of the research is speculative rather than evidence based.²⁸

Agile Engineering, Software Development, and Project Management

Beyond manufacturing, agile concepts have been reported in engineering, software development, and project management applications as well. Agile engineering, software development, and project management are examined together as they each rely upon an agile strategy for pursuing deliverables (tangible, verifiable work products) in an overlapping, staged manner rather than following a sequential or linear process.

Historical engineering approaches for the design and development of new products have been highly structured, linear processes. Using an overly simplistic explanation, the process initiates with product conceptualization, feasibility assessment, establishment of design requirements, creation of a preliminary design, creation of detailed design specifications, production planning and tool design, and finally production itself. Initial design requirements and the creation of detailed specifications may be identified jointly by the customer, marketing, and engineering. Once detailed requirements have been determined, various contributions from within the engineering function are made, possibly including concept engineering and prototyping, product engineering, as well as manufacturing engineering, all prior to production.

Various strategies within the engineering function have been promoted in order to remain agile. One example is reliance upon quality function deployment (QFD), which has been shown useful for collecting customer requirements (customer attributes) and translating these into detailed specifications (engineering characteristics) in order to clearly articulate stakeholders’ wants, needs, and preferences.²⁹ Furthermore, the use of QFD has been shown to greatly enhance functional collaboration (e.g., marketing and engineering) as well as hasten time to market through a variety of facilitated workshop techniques or interviews.

Significant agile engineering strategies identified in the literature include reliance upon experienced, cross functional teams; heavy emphasis upon technology and the management of product data, information, and knowledge over a product’s life; and the ability to share product data intraorganizationally and interorganizationally.³⁰ Tight integration in product development between an emerging design and the resulting application context is critical.³¹ Early test versions must contain the essential specifications providing a baseline for customers to give timely feedback. The architectural design is important in terms of its ability to accept late design changes. These authors found the generational experience of team members to be critical as it led to fewer resources being needed to complete projects and higher quality levels for more complex products. However, the authors note that this experience may not be beneficial in environments characterized by rapidly changing customer requirements.

As much as 80 percent of the cost structure of a product is defined while establishing engineering design requirements, product characteristics, and the information associated with products.³² A strategy that enables collaborative creation, management, dissemination, and use of product definition information across the extended enterprise (supply chain) is critical. Therefore, enterprisewide and supply chain information systems are critical determinants of agile strategies.

Historical software development methods have emphasized the creation of detailed plans consisting of specified processes and products. The systems development life cycle (SDLC) method, sometimes called plan-based or waterfall model, was one of the original software development methodologies. Planning and execution within SDLC is typically characterized as a linear and sequential process. It is a five-phased model that goes through requirements gathering (planning), analysis, design, implementation, and maintenance, with each phase being completed before the next phase commences. This waterfall approach may be depicted graphically as shown in Figure 9.2.

Figure 9.2 Systems development life cycle or waterfall model*

This process begins by determining the functionality required in the software (requirements gathering). During this phase, the customer is involved to convey necessary functionality and requirements. Once the necessary functionality and requirements have been determined, solution analysis begins. Solutions lead to a design or blueprint for the construction phase. Implementation is the actual construction of the system, with the software being deployed at the phase end. The customer is often not involved with analysis, design, or implementation phases. The support phase provides the necessary maintenance over the useful life of the system as the software would be upgraded or enhanced. The customer is often reintroduced during this latter phase for user acceptance testing purposes. This has been the primary means of software development for several decades. It has served to offer stable project requirements over the project life to facilitate project goal attainment.

Enhanced computing capabilities and the growth and continuing development of corporate information systems have led to more complex and interdependent systems over this span of time. Furthermore, significant up-front planning efforts suggest that the environment remains static. In a changing environment, the early assumptions or requirements and consequential specifications may not hold throughout the project. By its very nature, the phased approach of the SDLC is resistant to changing requirements.

Agile software development recognizes that custom-designed and custom-built systems lead to high costs and long installation lead times due to increasingly changing or even volatile environments. Since the early to mid-1990s, agile principles have been integrated into software development efforts. Common agile software development drivers include requirements that tend to evolve very quickly and become obsolete prior to project completion, time-to-market pressures, as well as rapid changes in competitive threats, stakeholder preferences, and software technology.³³

The Chrysler Comprehensive Compensation project (C3 project) in 1996 is often cited as the seminal Extreme Programming (XP) project fully utilizing the tools and techniques of agile software development throughout the project lifecycle.³⁴ In 2001, these techniques were formally codified into what has become known as the 12 principles behind the Agile Manifesto. The central ideas include the following: (1) Individuals and interactions may be more important than processes and tools, (2) the development of working software in a timely manner may be more important than comprehensive documentation, (3) customer collaboration is critical to success, and (4) quick responses to change trump following a detailed plan identified at the project outset.

Families of agile methods, which seek to address high costs and long installation times, have emerged over the past two decades. A few of the more popular methods comprising these families include Scrum, XP, Agile Modeling, Rational Unified Process, Crystal Clear, Dynamic Systems Development Method, Lean Development, and Rapid Product Development. These methods utilize various strategies to reduce costs and hasten delivery times, including short iterations and test-driven development; frequent releases based upon highest priority or most critical features; simpler designs; peer reviews and collective code ownership; as well as various communication tools such as prototyping, piloting applications, on-site customer participation, review meetings, and acceptance testing, all of which provide fast feedback. Various researchers provide detailed discussions complete with citations of these alternative strategies.³⁵

Rather than suggesting differences between agility and lean, some suggest that lean practices are applicable to the design, development, deployment, and validation of software projects.³⁶ These authors have gained acclaim for emphasizing waste elimination, bureaucracy reduction, and enhanced learning with short cycles, frequent builds, and fast iterations with frequent feedback pulling changes into products. Seven principles of lean software development, similar to agile strategies of other functional areas, are promoted, including (1) optimizing the whole (systems perspective), (2) eliminating waste (e.g., unnecessary code and functionality, using smaller teams with less staff), (3) building quality into designs (considering that earlier testing and later specification identification can reduce waste), (4) learning constantly, (5) delivering fast, (6) engaging everyone, and (7) improving continuously.

However, to date, there exists little, if any, research that verifies the efficacy of these agile software development strategies. The vast amount of research identifying agile drivers, concepts, and strategies (enablers) underscores the implied importance of agility. However, there is little, if any, empirical evidence documenting the value of these agile strategies. Few studies have empirically confirmed the benefits of agile methods. It has been suggested that the following software development strategies provide positive results: Share an early, low-functionality version (“microproject”) with customers for feedback followed with an iterative approach to adding functionality, all the while using an experienced development team and a product architecture that offers flexibility. However, these research findings did not directly compare the iterative approach with a traditional waterfall method. Rather, results achieved were compared to historical project results.³⁷ Subsequently it has been noted that most of the research is speculative rather than evidence based.³⁸

Traditional project management planning promotes a hierarchical planning approach including clearly defined, well-documented and planned project specifications, budgets, and schedules. Traditional project management planning promotes a five-phase approach consisting of initiating, planning, executing, monitoring and control, and closing. Although time-consuming, this hierarchical decomposition approach to planning facilitates subsequent execution. Decomposition is similar in concept to the SDLC method of software development. Decomposition is a hierarchical and sequential division of work, possibly into stages. As each stage is completed, there is typically an assessment performed. This breaking down process enhances communication, estimating accuracy, monitoring and control, as well as stakeholder understanding and motivation.

Over the past 30 years, numerous strategies have been developed to promote the faster accomplishment of project objectives. One of these time-saving strategies is fast tracking, the deliberate overlapping of sequential tasks so successor tasks may commence sooner rather than later. Within the realm of project management, agile is a recent term being used to refer to a more advanced set of strategies to achieve a faster response to quickly changing environmental conditions. As noted in the project management literature, agile project management (APM) emphasizes

1. A team approach with frequent interpersonal interaction and communications and greater stakeholder involvement and ­communications to facilitate a rapid approval process for new specification adoption as well as process and product change orders;
2. Simultaneous or parallel task execution emulating the effects of fast tracking; and
3. Decomposition of specifications of deliverables into stages.

To date, APM relates largely to the management and control of software projects. APM principles may be applicable to projects of any type. The emphasis on people and the desire to remain flexible and adaptive is critically important in light of project uncertainty and complexity. Attempts have been made to widen the scope of APM to projects with different characteristics, for example, construction projects. Potential exists for gains to be made from the adoption of APM in the predesign and design phases of construction as the iterative and incremental development approach of agile methods can promote creative solutions, particularly in an environment with complex and uncertain requirements.³⁹

Most of the research contrasts traditional project management with APM. Three important differences are noted: (1) Traditional projects are clearly articulated with well-documented and planned project specifications, budgets, and schedules, whereas APM discovers complete project requirements iteratively; (2) traditional projects manage and control with the budget, schedule, and project scope, whereas APM focuses more on deliverables and value offerings with budgets and timelines being secondary; (3) traditional projects distribute work to teams and specialists by matching well-defined requirements with capabilities, whereas APM requires colocation of team and staff members to promote faster responses to change order requests and to produce incremental accomplishments.⁴⁰

The literature offers an intriguing five-phased approach for APM, consisting of (1) envisioning, (2) speculating, (3) exploring, (4) adapting, and (5) closing.⁴¹ The underlying concept of these five phases for projects with complex and possibly uncertain requirements is for team members to explore different avenues to achieve outcomes, test, and adapt the more acceptable solutions in an ongoing iterative manner, until project requirements are achieved. This appears to be a less structured environment relying upon greater flexibility, informal communications, and evolving requirements. Results documenting its use would be welcome.

Similar to agile manufacturing, the shift toward APM has been driven by increased environmental turbulence and the shortcomings in traditional project-based approaches. Future development of APM strategies based upon organizational improvisation will occur as project timetables continue to compress. Seven key APM constructs have been identified to promote future APM strategy development: (1) creativity, (2) intuition, (3) bricolage, (4) adaption, (5) compression, (6) innovation, and (7) learning.⁴² The author suggests that more experienced project managers who are able to adapt their style based upon these constructs or the components of APM may be better positioned to resolve ambiguities and shorten delivery times.

Agile Supply Chain Management

Despite suggestions in the literature that lean and agile are different paradigms developed in the manufacturing sector, a suggestion has been offered that they should not be viewed separately within a supply chain. Rather, the suggestion is to combine these paradigms to form a total supply chain strategy utilizing market knowledge and positioning of inventory to establish a “decoupling point.”⁴³ Supply chain inventory serves as a decoupling point or as a point of postponement at which a product may be differentiated. The decoupling point may be used to buffer upstream lean manufacturing, which benefits from potential waste elimination afforded by a stable, level schedule, from the downstream satisfaction of fluctuating demands in a volatile marketplace, thus providing agility. This concept has been referred to as leagility. The view of these authors is supported by consideration of a personal computer supply chain case study.

The leagile concept has been extended by suggesting that businesses must first identify and fully understand marketplace requirements, including product variety demands and the extent of demand variability. This understanding promotes the supply chain’s information enrichment capability. The authors argue that this knowledge must be used in conjunction with the decoupling point to achieve leagility.⁴⁴

Another author attempts to distinguish between lean and agility by suggesting that lean is best restricted to waste elimination in factories within high-volume, low-variation environments, while agility refers to the ability to respond rapidly to volatility in demand, from either ­volume or variety.⁴⁵ The author notes several strategies that promote agility, including (1) capturing of real-time customer demand and its exchange among supply chain partners to drive planning responses, (2) the use of a decoupling point, prior to which inventory is held in a delayed configuration, and (3) leveraging supplier relations with fewer, trusted strategic partners, which permits the collaborative exchange of sensitive information.

The agile supply chain literature offers a clear consensus of various strategies that promote supply chain agility. Included among these are: (1) information technology and information exchanges, both intra- and interorganizationally, which enable the capture of real-time demand, which promotes a fast response capability to marketplace volatility; (2) the use of a decoupling point, prior to which inventory is held in a delayed configuration; and (3) investing and leveraging supply chain partner capabilities in order to promote the integration of business ­processes throughout the chain.

Agile Marketing Management

The idea promoted within the agile marketing literature is best described as “agile competitors precipitate change, creating new markets and new customers out of their understanding of the directions in which new ­markets and customer requirements are evolving.”§§ Agile marketing has been indirectly described as “opportunistic actions in capturing new ­markets and responding to new customer requirements,” which is ­necessary for success, given the drivers in Table 9.1.¶¶

Developed principally as a marketing concept to facilitate customer needs assessment, product development, and quality management, as noted earlier, QFD can be viewed as a significant agile methodology. QFD has been shown useful for collecting customer requirements ­(customer attributes) and translating these into detailed specifications (engineering characteristics) in order to clearly articulate stakeholders’ wants, needs, and preferences. QFD has the ability to significantly reduce product time to market.⁴⁶ Furthermore, the use of QFD has been shown to greatly enhance functional collaboration through a variety of facilitated workshop techniques or interviews. QFD has been successfully applied within various function areas, including marketing, engineering, and even software development.⁴⁷

Agile manufacturing principles for the creation and development of proactive, strategic marketing plans in small- and medium-sized enterprises in the United Kingdom have been examined.⁴⁸ These authors promote a three-step, proactive agile marketing framework. First, a bottom-up focus on identifying tactical improvement opportunities within the operating environment is promoted. Second, the identification of responses to address the vulnerabilities identified as an outcome of the first step occurs. These authors contend this creates a robustness of the operating system. Third, once robustness has been achieved, the authors encourage a campaign to better anticipate and even further stimulate marketplace demands. It is noted that stimulating marketplace demands while production systems have weaknesses could lead to the loss of customers. Addressing operational weaknesses can present opportunities to grow one’s business. The authors suggest that marketing agility enables companies to reconfigure their marketing efforts on short notice.

The complete body of agile research literature offers three important conclusions. First, regardless of the functional discipline or application (e.g., manufacturing, engineering, software development, project management, supply chain, and marketing), there is widespread agreement in the research literature that agility refers to the ability of a firm to rapidly respond to volatile, unpredictable marketplace demands. Whether the agile paradigm is truly different from the lean paradigm has yet to be proven. There seems to be a consensus in the literature that agile represents a significant paradigmatic change and that agile and lean are different.

Second, there is also widespread agreement within the multidisciplinary agile research suggesting a common body of strategies for achieving agility. The five agile strategies most often cited are:

1. Organizational mastery of uncertainty and swift responses, given rapid marketplace change. The ability to innovate, given marketplace volatility and uncertainty, is essential.
2. Investing and empowering one’s team (possibly small and inclusive of all stakeholders) in order to leverage their ensuing capabilities. Agility requires speed to react to changing market conditions and the ability to deliver value to the customer. Investing in one’s team better positions the enterprise to achieve rapid response and value delivery proposition.
3. A systems viewpoint and reliance upon cooperation that enhances competitiveness. This includes both intraorganizational as well as interorganizational cooperation. Reliance upon a shared vision and the integration of whole business processes across a supply chain, including virtual organizations, partnerships, or other forms of cooperation are essential.
4. Intraorganizational and interorganizational information technology and exchanges. Technology and the ability to capture real-time information and rapidly share vast amounts of information in a virtual manner across a supply chain offers value. The timely exchange of this information is essential.
5. The incremental development of product offerings, given swiftly changing marketplace demands. It is critical to constantly assess customer demands and to have the ability to rapidly alter current product configurations.

Third, the focus of this multidisciplinary body of agile research ­literature is on (1) defining agility, (2) identifying the drivers for agility, (3) discussing agile concepts, and (4) identifying the strategies (enablers) for achieving agility. To date, there exists little, if any, research that verifies the efficacy of agile strategies. The vast amount of research identifying agile drivers, concepts, and strategies (enablers) underscores the implied importance of agility. However, there is little, if any, empirical evidence documenting the value of these agile strategies. As noted earlier, most of the research promoting agility is speculative rather than evidence based. To date, there exists scant empirical evidence regarding the efficacy of agile strategies, which leads to confusion regarding the arguments that agility is different from lean.

Lean

Whereas contributions to the flexibility and agility bodies of literature have largely remained unchanged since approximately the year 2000, the body of lean knowledge continues to experience considerable contributions since the early reference to just-in-time terminology began to emerge in the late 1970s and early 1980s. Lean has been a prominent business construct or philosophy over the past several decades.⁴⁹

The term lean was originally coined in 1988.⁵⁰ Much of the lean body of literature has evolved subsequent to 1988, with the vast majority of this body of knowledge being promoted since 1995. Therefore, the chronological presentation of its body of literature in this manuscript appears subsequent to the agile body of literature.

Although much of the lean body of literature has evolved subsequent to 1988, it should be recognized that the body of lean knowledge has been evolving for millennia. The practices of specialized work, division of work, flow lines, ergonomics, process charts, time studies, and others are fundamental lean practices, with some being used for thousands of years. Lean represents a systematic body of knowledge devoted to a continuous journey seeking improvements in productivity and quality, lowered cost, shortened delivery time, enhanced safety, improved environment, and fortified morale, all of which may be refined to a single objective of best practices devoted to continuous improvement.⁵¹

Some authors suggest the principal difference between lean and agility is simply whether one examines system capability internally (lean) or externally (agility). Others suggest a primary differentiator between the two constructs being agile’s ability to respond quickly to unpredictable markets, whereas lean only offers the ability to respond quickly to anticipated events. One might observe that early agile manuscripts portray lean in a shortsighted manner, given its evolutionary development since 1995. For instance, one manuscript notes that while there are similarities between agile and lean, there are fundamental differences, including the following points:

• Lean production is regarded by many as simply an enhancement of mass production, while agility offers the capability for more highly customized products in varying batch sizes.
• Lean strives for economies of scale (savings attributable to larger lot sizes of specific items), while agility pursues economies of scope (savings attributable to larger volumes achieved through a diversification of items).
• Lean focuses solely internally on the factory floor, while agility looks both internally and externally recognizing a holistic or systematic viewpoint.
• Lean is a single company pursuit, while agility pursues supply chain partnerships or virtual relationships.
• Lean pursues simple objectives of productivity and cost efficiencies, while agile pursues additional objectives of speed and learning.⁵²

Hopefully, one recognizes that the evolutionary development of the lean body of knowledge dispels each of these fundamental differences. For instance, single-minute exchange of dies (SMED)⁵³ recognizes that if setup times can be reduced, the consequential lot size and inventory can likewise be reduced. Flexibility, an objective emphasized by lean and pursued with strategies such as multiskilled workers and general-purpose equipment, affords economies of scope (efficiencies wrought by variety) as well as economies of scale. Lean does possess a systematic viewpoint, especially in light of the integral system elements of leadership, culture, teamwork, as well as practices and tools.⁵⁴ The emergence of supply chain management concepts since approximately 1980 has witnessed significant interorganizational efforts to extend lean concepts to supply chain partnerships and virtual relationships. Finally, there can be no doubt that lean acknowledges kaizen efforts, which require learning.

One intriguing observation when one contrasts the lean and agile bodies of literature is the complete absence within the agile literature of encouraging waste elimination. Although one author does suggest that lean is best restricted to waste elimination in factories within high-volume, low-variation environments, ultimately however, waste elimination emphasis is overlooked when the distinguishing feature of agility is noted to be its ability to respond rapidly to volatility in demand, from either volume or variety.⁵⁵ Therefore, one significant difference between the lean and agile literature is the absence of waste reduction or elimination within agile strategies.

Rather than reiterate content identified in earlier chapters, suffice it to say that an emergent theme in the flexibility, agility, and lean bodies of literature is the recognition of the need for adaptability and fast responses, given the instability and unpredictability of the environment due to either internal or external concerns. Much of this instability and unpredictability in the environment may be attributed to rapid technological development and change. The later constructs of agility and lean have expanded upon and enveloped flexibility. The three constructs of flexibility, agility, and lean actually represent an evolutionary path of ­continuous improvement.

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