Agile manufacturing is a business production strategy that uses modular parts and automation, rather than an assembly line model, to increase customer satisfaction by enabling goods to be produced and supplied faster and with greater customization. This production design has many benefits, including the ability to change product types quickly and the ability to maintain smaller inventory levels. Agile production also has drawbacks, however, like extensive preparation and high initial cost investment.
Many production companies shift to an agile manufacturing model to better meet consumers' desire for instant gratification. The automation required to construct a product in an agile manufacturing environment results in fast production times, better serving demand for a particular item. Retailers and distributors supplied by agile manufacturing processes will have a large stock of desired products ready for consumers to purchase, rather than having to backorder items, which can frustrate excited shoppers.
The agile manufacturing strategy employs a modular construction for all products; as a result, each product can be broken down into its individual modular components for easier customization or alteration. As it is often possible to avoid creating new designs and parts, production time and cost per unit tend to be lower in this form of manufacturing. An older product can be revamped into a new form; some examples might be changing the uniquely colored housing on a cell phone or adding a camera to an existing product.
Inventory levels are reduced significantly with this production method since most tasks are performed by machines; there are no extra pieces to be saved for later use from a manual manufacturing line. A smaller inventory results in lower supply fees and taxes, which directly reduces the cost of each product. This reduction in cost allows the final retail item to be sold at an extremely competitive price, leading to overall higher profits.
One of the main drawbacks to agile manufacturing is the preparation it requires. Each automated machine needs to be purchased and programmed for the specific modular production items. Suppliers, such as raw material companies, must be contractually bound to the production company to ensure that a constant stream of product is available for manufacturing processes. In addition, employees must be prepared by servicing the machines on a consistent basis to prevent any unexpected failures.
Along with preparation, the initial start-up costs can be an obstacle. A company must spend a substantial amount of money to purchase machines and materials to begin the agile manufacturing process. Many businesses do not have the liquid assets available for such a large initial investment; however, for those that do, a successful production line will return the investment in a just a few years.