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To cite this document: Helena Carvalho, Susana Duarte, V. Cruz Machado, (2011),"Lean, agile, resilient and green: divergencies
and synergies", International Journal of Lean Six Sigma, Vol. 2 Iss: 2 pp. 151 - 179
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Lean, agile,
resilient
and green
151
Abstract
Purpose This paper aims to explore the divergences and commitments between the lean, agile,
resilient and green paradigms while investigating the effect of paradigms practices within supply
chain attributes.
Design/methodology/approach A conceptual model with lean, agile, resilient and green practices
and supply chain management attributes is proposed. Causal diagrams were used to represent the
relationships between paradigm practices and supply chain attributes. The four diagrams were
aggregated to build the conceptual model.
Findings The conceptual model allows for the identification of synergies and divergences resulting
from the paradigms practices implementation. The synergies between paradigms are related to
information frequency and integration level increasing as well as reduction of production lead time
and transportation lead time. However, other supply chain attributes such as capacity surplus,
inventory level and replenishment frequency are affected in opposite directions by some paradigms
creating divergences.
Research limitations/implications The model relationships were established using an anecdotal
approach derived from the literature review, reflecting only a partial view of supply chain dynamics.
More research related to other supply chain attributes and/or paradigm practices, and validation of the
proposed relationships is suggested.
Practical implications The proposed model can be the basis for further research in lean, agile,
resilient and green paradigms, contributing to a more sustainable and competitive lean supply chain
with the necessary agility toward a quick response, resiliency to disruptions, and harmonization with
the ecologic and environmental aspects.
Originality/value To the authors knowledge this paper is the first to provide an understanding
about the tradeoffs among lean, agile, resilient and green supply chain paradigms.
Keywords Lean production, Agile production, Supply chain management
Paper type Conceptual paper
1. Introduction
Todays organizations need to answer to the increasing rate of change: products and
technologys life cycles are getting shorter; competitive pressures force quick changes in
the design of products and services; customers demand compels bigger differentiation.
There is an increase in awareness that businesses cannot compete as isolated entities, yet
can do so as networks (Min and Zhou, 2002). The supply chain, as a network, is expected
to provide the right products and services on time, with the required specifications, at the
The authors would like to acknowledge Fundacao para a Ciencia e Tecnologia for its support
(project MIT-Pt/EDAM-IASC/0033/2008). Helena Carvalho was supported by a PhD fellowship
from Fundacao para a Ciencia e Tecnologia (SFRH/BD/43984/2008).
IJLSS
2,2
152
right place to the customer. However, a supply chain can be quite complex; it is usually
defined as a set of interdependent organizations that act together to control, manage and
improve the flow of materials, products, services and information, from the origin point
to the delivery point (the end customer) in order to satisfy the customers needs, at the
lowest possible cost to all members (Lambert et al., 1998).
The lean supply chain is a strategy based on cost reduction and flexibility, focused on
processes improvements, through the reduction or elimination of the all wastes
(non-value adding operations). It embraces all the processes through the products life
cycle, starting with the product design to the product selling, from the customer order to
the delivery. However, when organizations are subject to eventual disruptions, caused
by sudden and unforeseen events (such as economic and political crises or environmental
catastrophes); the lean practices may have contributed to the decline of economic
conditions (Azevedo et al., 2008). In a global economy, with supply chains crossing
several countries and continents, from raw materials to the final product, those events
(even if they happen in a remote place) can create large-scale disruptions. These
disruptions are propagated throughout the supply chain, causing severely negative
effects in supply chains, leading to unfulfilled orders. So, it seems that what can be good
from a competitive point of view, can cause a disaster in crisis situations; it may be worse
if the organizations cannot be resilient and robust enough to recover the loss in
competitiveness. In an actual competitive market, it is necessary that supply chains
become more resilient to disruptive events.
Other pertinent issues in supply chain management deal with the environmental
sustainability. The green supply chain management is an important organizational
philosophy to achieve corporate profit and market share objectives by reducing
environmental risks and impacts while improving the ecological efficiency of these
organizations and their partners. As a synergistic joining of environmental and supply
chain management, the competitive and global dimensions of these two topics cannot
go unnoticed by organizations.
The tradeoffs between lean, agile, resilient and green (LARG) management paradigms
are actual issues and may help supply chains to become more efficient, streamlined and
sustainable. Leanness in a supply chain maximizes profits through cost reduction, while
agility maximizes profits through providing exactly what the customer requires. Resilient
supply chains may not be the lowest cost, but they are more capable of coping with the
uncertain business environment. Also, environmental practices must be addressed to
assure that the management system is sustainable.
This paper intends to present a conceptual model to provide the necessary
understanding of synergies and divergence paradigms to contribute to a more
sustainable and competitive supply chain. In the following section, a main review of the
literature related to LARG supply chain management paradigms is presented,
identifying each paradigm practices and their impact/consequence on the supply chain.
In Section 3, a model is developed to understand relationships between the supply
chain attributes changed by the paradigms and supply chain key performance
indicators (KPIs). For evaluating the effects of each paradigm practices in the supply
chain performance, the links between supply chains attributes and performance
indicators were explored. The following section develops a conceptual model to explore
supply chain attributes and paradigm inter-relationships. Finally, main conclusions are
drawn.
Lean, agile,
resilient
and green
153
IJLSS
2,2
154
2.2 Agile
The supply chain objective is to deliver the right product, in the right quantity, in the
right condition, to the right place, at the right time and for the right cost. Since
customer requirements are continuously changing, supply chains must be adaptable to
future changes to respond appropriately to market requirements (and changes).
In lean supply chains the focus is on waste elimination, but in agile supply chains
the focus is the ability of comprehension and rapid response to market changes.
An important difference is that lean supply is associated with level scheduling, whereas
agile supply means reserving capacity to cope with volatile demand (Christopher and
Towill, 2000). The agile supply chain intends to have the ability to respond rapidly and
cost-effectively to unpredictable changes in markets and increasing levels of
environmental turbulence, both in terms of volume and variety (Agarwal et al., 2007;
Christopher, 2000). Baramichai et al. (2007) used the following definition:
An agile supply chain is an integration of business partners to enable new competencies in
order to respond to rapidly changing, continually fragmenting markets. The key enablers of
the agile supply chain are the dynamics of structures and relationship configuration, the
end-to-end visibility of information, and the event-driven and event-based management.
Naylor et al. (1999) used the decoupling point concept to divide the part of the supply chain
that responds directly to the customer (demand is variable and a high product variety)
from the part of the supply chain that uses forward planning and a strategic stock to
buffer against the demand variability (demand is smooth and products are standard).
He proposed the designation leagile for supply chains where the lean principles are
followed up to the decoupling point and agile practices are followed after that point.
Agarwal et al. (2007) have shown that supply chain agility depends on the
following: customer satisfaction, quality improvement, cost minimization, delivery
speed, new product introduction, service level improvement and lead-time reduction.
Literature on supply chain agility describes the dependence of agility on the
characteristics of some performance variables; however, influence of interrelationships
among the variables on the supply chain agility has been hardly taken into account
(Agarwal et al., 2007).
2.3 Resilience
There is evidence that the tendencies of many companies to seek out low-cost solutions,
because of pressure on margins, may have led to leaner but more vulnerable supply
chains (Azevedo et al., 2008; Peck, 2005). Todays marketplace is characterized by
higher levels of turbulence and volatility. As a result, supply chains are vulnerable to
disruption and, as a consequence, the risk to business continuity has increased
(Azevedo et al., 2008). Whereas in the past the principal objective in supply chain
design was cost minimization or service optimization, the emphasis today has to be
upon resilience (Tang, 2006). Resilient supply chains may not be the lowest-cost supply
chains, but they are more capable of coping with the uncertain business environment.
Resilience refers to the ability of the supply chain to cope with unexpected
disturbances. Supply chain resilience is concerned with the system ability to return to its
original state or to a new one, more desirable, after experiencing a disturbance, and
avoiding the occurrence of failure modes. The goal of supply chain resilience analysis
and management is to prevent the shifting to undesirable state, i.e. the ones where failure
modes could occur.
In supply chain systems, the objective is to react efficiently to the negative effects of
disturbances (which could be more or less severe). The aim of the resilience strategies
has two manifolds (Haimes, 2006):
(1) to recover the desired values of the states of a system that has been disturbed
within an acceptable time period and at an acceptable cost; and
(2) to reduce the effectiveness of the disturbance by changing the level of the
effectiveness of a potential threat.
The ability to recover from the disturbance occurrence is related to the development of
responsiveness capabilities through flexibility and redundancy (Rice and Caniato,
2003). Flexibility is related to the investments in infrastructure and resources before
they actually are needed. Examples of flexibility are creating multi-skilled workforce,
designing production systems that can accommodate multiple products and real-time
changes, and adopting sourcing strategies to allow transparent switching of suppliers
(Rice and Caniato, 2003). Redundancy is concerned with maintaining the capacity to
respond to disruptions in the supply network, largely through investments in capital
and capacity prior to the point of need. Examples of redundancy include an excess of
capacity requirements, committing to contracts for material supply (buying capacity
whether it is used or not), and maintaining a dedicated transportation fleet (Rice and
Caniato, 2003). Rice and Caniato (2003) states differentiated flexibility from redundancy
in the following way: redundancy capacity may or may not be used; it is this additional
capacity that would be used to replace the capacity loss caused by a disruption.
Flexibility, on the other hand, entails restructure to the previously existing capacity.
Tang (2006) proposes the use of robust supply chain strategies to enable a firm to
deploy the associated contingency plans efficiently and effectively when facing a
disruption, making the supply chain firm more resilient. This author proposes
strategies based on:
.
postponement;
.
strategic stock;
.
flexible supply base;
.
make-and-buy trade-off;
.
economic supply incentives;
.
flexible transportation;
.
revenue management;
.
dynamic assortment planning; and
.
silent product rollover.
Resilience should be designed in Christopher and Peck (2004). Christopher and Peck
(2004) propose the following principles to design resilient supply chains:
.
selecting supply chain strategies that keep several options open;
.
re-examining the efficiency vs redundancy trade off - strategic disposition of
additional capacity and/or inventory at potential pinch points can be extremely
beneficial in the creation of resilience within the supply chain;
.
developing collaborative working across supply chains to help mitigating risk;
Lean, agile,
resilient
and green
155
IJLSS
2,2
156
Lean, agile,
resilient
and green
Eco-design is defined as the development of products which are more durable, energy
efficient; avoiding the use of toxic materials and those which can be easily disassembled
for recycling (Gottberg et al., 2006). It provides opportunities to minimize waste and
improve the efficiency of resource consumption through modifications to product size,
serviceable life, recyclability and utilization characteristics. However, the eco-design
strategy presents some potential disadvantages including the following: a high level of
obsolete products in fashion-driven markets, increased complexity and increased risk of
failure, among others (Gottberg et al., 2006).
The greening of the supply chain is also influenced by the following production
process characteristics (Sarkis, 2003):
.
the process capability to use certain materials;
.
the possibility to integrate reusable or remanufactured components into the
system (which would require disassembly capacities); and
.
the design for waste minimization (energy, water, raw materials and non-product
output).
157
The reverse logistics focuses primarily on the return of recyclable or reusable products
and materials into the forward supply chain (Sarkis, 2003). To reintroduced recycled
materials, components and products into the downstream production and distribution
systems, it is necessary to integrate reverse material and information flows in the
supply chain. Owing to the reverse material flow, traditional production planning and
inventory management methods have limited applicability in remanufacturing
systems (Srivastava, 2007). It is necessary to consider the existence of the returned
items that are not yet remanufactured, remanufactured items and manufactured items.
Distribution and transportation operations networks are also important operational
characteristics that will affect the green supply chain (Sarkis, 2003). With the rapid
increase of long-distance trade, supply chains are increasingly covering larger
distances, consuming significantly more fossil-fuel energy for transportation and
emitting much more carbon dioxide than a few decades ago (Venkat and Wakeland,
2006). Lean supply chains typically have lower emissions due to reduced inventory
being held internally at each company, but the frequent replenishment generally tends
to increase emissions. As distances increase, it is quite possible for lean and green to be
in conflict, which may require additional modifications to the supply chain (perhaps
moving it away from the ideal lean configuration) if emissions are to be minimized
(Venkat and Wakeland, 2006). Therefore, lean may be green in some cases, but not in
others.
According to Srivastava (2007) green supply chain management can reduce the
ecological impact of industrial activity without sacrificing quality, cost, reliability,
performance or energy utilization efficiency; meeting environmental regulations to not
only minimizing ecological damage, but also leading to overall economic profit.
IJLSS
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158
Understands customer
requirements by interfacing
with customers and the
market and being adaptable to
future changes (Vonderembse
et al., 2006)
Agile
Approach to choosing
suppliers
Organizational
structure
Alliances (with
suppliers and
customers)
Manufacturing focus
Purpose
Lean
Focuses on sustainable
development - the reduction of
an ecological impact on
industrial activity
Green
(continued)
Resilient
Lean, agile,
resilient
and green
159
Table I.
LARG characterization
Product variety
Market
Table I.
Generates high turns and
minimizes inventory
throughout the chain
(Vonderembse et al., 2006)
Resilient
Green
Introduces reusable/
remanufactured parts in the
material inventory
(Srivastava, 2007); reduces
replenishment frequencies to
decrease carbon dioxide
emissions (Venkat and
Wakeland, 2006); reduces
redundant materials (Darnall
et al., 2008)
Invests aggressively in ways Reduces lead-time (Tang,
Reduces transportation lead
to reduce lead times
2006; Christopher and Peck,
time as long it does not
(Vonderembse et al., 2006)
2004)
increase carbon dioxide
emissions (Venkat and
Wakeland, 2006)
Designs products to meet
Postponement (Tang, 2006)
Eco-design and incorporation
individual customer needs
of complete material life cycle
(Vonderembse et al., 2006)
for evaluating ecological risks
and impact (Zhu et al., 2008;
Gottberg et al., 2006)
High (Christopher and Towill, High (Christopher and Peck, For a multiproduct analysis,
2000; Agarwal et al., 2006)
2004)
environmental management
decisions become increasingly
complex (Sarkis, 2003)
Acquires new competencies, Have the capabilities to act on Demands more
develops new product lines,
and anticipate changes in
environmentally friendly
and opens up new markets
markets and overcome
practices (Vachon and
with a volatile demand
demand risk (Christopher and Klassen, 2006)
(Vonderembse et al., 2006;
Peck, 2004; Tang and Tomlin,
Christopher and Towill, 2000; 2008)
Agarwal et al., 2006)
Agile
160
Inventory strategy
Lean
IJLSS
2,2
between metrics at the strategic, tactical, and operational levels (Gunasekaran et al.,
2001; Morgan, 2007). Another point of view is that organizations have realized the
importance of financial and non-financial performance measures (Gunasekaran et al.,
2001). Financial measurements are appropriate for strategic decisions, but daily
operational measurements might be supported better with non-financial measures
(Gunasekaran et al., 2001; Martin and Patterson, 2009).
It is essential to identify which measurement metrics really matter to the business
(Gunasekaran et al., 2001). In this perspective, is necessary to identify which KPIs are
crucial to the business (Morgan, 2007). Another aspect is concerned with the number of
metrics to be used: it is not a notable number of metrics to be used that counts, because
performance measurements can be better addressed using only a few good metrics
(Gunasekaran et al., 2001).
Many authors and researchers have explored which performance metrics should be
used. Since supply chains compete against other supply chains, it is necessary to consider
a holistic performance measurement, coordinating measures across the different entities
on the supply chain (Chia et al., 2009). Chia et al. (2009) provided a balanced scorecard
framework to examine what is measured and how performance measurement is perceived
by entities on their supply chain. Cai et al. (2009) propose a framework using a systematic
approach to improving the iterative KPIs accomplishment in a supply chain context.
They had identified 20 KPIs and classified them into four categories: resource, output,
flexibility, and innovativeness. The framework and methodology offers important
theoretical contributions to solve KPI accomplishment problems and provides a good
insight for further work.
The EPA United States Environmental Protection Agency (2007) adds
environmental metrics to lean metrics and refers that:
[. . .] one simple way to understand how your companys lean efforts are affecting the
environment is to add one or more environmental performance metrics to the metrics used to
evaluate and track the success of lean implementation.
Other authors (Kainuma and Tawara, 2006) suggest that supply chain performance
evaluation should be made from both points of view: managerial and environmental.
Another contribution is in the study of lean, agile and leagile supply chains by
Naylor et al. (1999). These authors refer that there are many metrics for evaluating the
performance of supply chains, but they may be aggregated as service, quality, cost and
lead-time. They evaluate the importance of the different metrics for leanness and
agility and conclude that the best situation would be a supply chain that could use both
paradigms. Agarwal et al. (2006) also develop a framework to analyze the relationship
among lead-time, cost, quality, and service level on lean, agile and leagile supply
chains paradigms. The proposed framework also analyzes the relationships and
inter-dependencies through dimensions condensed such as market sensitiveness,
process integration, information driver and flexibility and its related characteristics.
Based on a literature review, Table II summarizes the different KPIs and respective
measures used to develop performance measures. The KPIs were grouped in:
.
financial indicators (assets management, revenues and cost);
.
environmental indicators;
.
flexibility indicators (operations flexibility and market responsiveness);
Lean, agile,
resilient
and green
161
Table II.
KPIs and its measures
Flexibility
Operations flexibility
Cost
Revenues
Assets management
Inventory turn-over
Return on assets
Return on investment
Number of customers retained
Market share and earnings
Sales
Rate of losing sales
New customer orders
Profitability, Payment terms
Gross revenue
Profit before tax
Design and engineering cost
Conversion cost
Quality assurance cost
Administration cost
Materials cost
Inventory cost
Production and shipment cost
Supply chain management costs
Turnover costs
Information management costs
Distribution costs
Air emissions
Materials use and waste
Water use and waste and pollution
Energy use
Scrap/non-product output
Hazardous materials use and waste
Delivery flexibility
Procurement flexibility
Information systems flexibility
Performance measures
(continued)
Sources
162
Financial
Key indicators
IJLSS
2,2
Operational
Information flow
Integration
Inventory
Information availability
Partner relationship
Innovation
Innovation
Market responsiveness
Key indicators
Logistics flexibility
Stability of schedule
Production schedule, flexibility and planning
Flexibility to meet customers demand
Flexibility to meet market changes
Customer responsiveness
New products flexibility
New services implemented per year
Supply chain stability
Sales of new product
Process improvement
Number of new products launched
Web-enabled service and web application
Efficiency improvement
E-response
Invoice presentation and payment
Document management
Supplier evaluation
Sharing of information
Information availability
Information accuracy
Information timeliness
Raw materials, finished goods and in-stock rates
Performance measures
(continued)
Sources
Lean, agile,
resilient
and green
163
Table II.
Table II.
Service level
Time
Sources
Performance measures
164
Key indicators
IJLSS
2,2
innovation indicators;
integration indicators (information flow, partner relationship and information
availability); and
operational indicators (inventory, quality, service level and time).
Lean, agile,
resilient
and green
165
.
.
IJLSS
2,2
166
A causal diagram was selected to capture the supply chain dynamics. With this
diagram, it is possible to visualize how the supply chain attributes affect the
performance measures. A positive link means that the two nodes move in the same
direction, i.e. if the node in which the link start decreases, the other node also decreases
(if all else remains equal). In the negative link, the nodes change in opposite directions,
i.e. an increase will cause a decrease in another node (if all else remains equal) (Sterman,
2000).
To construct the cause-effect diagram it was supposed that the supply chain
attributes, which are the consequence of the practices implementation, are directly
responsible for supply chain performance measures values. For example, the
replenishment frequency (a supply chain attribute) will establish the value of the
performance measures customer responsiveness and distribution cost. Increasing
the value of the replenishment frequency will increase the performance measures
customer responsiveness (more frequent deliveries of small quantities increases the
capacity to respond to customer needs) and distribution cost (more frequent deliveries
imply a bigger cost).
However, some performance measures could have an indirect effect on supply chain
attributes, since it is presumed that when a certain performance measures value occurs,
the decision makers will adjust some supply chain attributes in a rational manner. For
example, facing a high value of procurement flexibility and logistics flexibility
(performance measures), the decision maker will adjust the inventory level (a supply
chain attribute) to a lower value since, if necessary, it is easier to purchase materials and
therefore it is not necessary to constitute a high level of material inventories.
Table II is used to identify the measures that are influenced by the selected supply
chain attributes. Figure 1 shows the cause-effect relationships between the
performance measures and supply chain attributes.
3.4 Relationships between KPIs and supply chain attributes
Since it would be difficult to analyze all possible cause-effect relationships between
performance measures and supply chain attributes, the study was limited to the
principal paths between the KPIs and supply chain attributes. Figure 2 shows the
diagram with the performance indicator and supply chain attributes relationships.
The KPI service level is affected positively by the replenishment frequency (it
increases the capacity to fulfill rapidly the material needs in supply chain) (Holweg, 2005),
capacity excess (a slack in resources will increases the capacity for extra orders
production) (Jeffery et al., 2008) and integration level (the ability to co-ordinate operations
and workflow at different tiers of the supply chain allow to respond to changes in
customers requirements) (Gunasekaran et al., 2008). An increasing in the integration level
will lead to a high frequency of information sharing between supply chain entities; it will
make possible a high replenishment frequency. The lead-time reduction improves the
service level (Agarwal et al., 2007).
The inventory level has two opposite effects in the service level (the mark ^ is used
to represent this causal relation in Figure 2). Since it increases materials availability a
higher service level is expected (Jeffery et al., 2008). But this relation only happens
under stable customer demands. High inventory levels generate uncertainties (van der
Vorst and Beulens, 2002), leaving the supply chain more vulnerable to sudden changes
(Marley, 2006), and therefore reducing the service level in volatile conditions.
Delivery
flexibility
Production
schedule:
flexibility and
planning
Direct
relationship
Indirect
relationship
KPI
Supply chain
attributes
Replenishment
frequency
Legend:
Information
frequency
+
+
Capacity
surplus
+
Cost
Procurement
flexibility
Production
cost
Logistics
flexibility
Service
level
Inventory
obsolescence
ratio
Flexibility to meet
current customer
demand
Number of
customers
retained
New products
flexibility
Integration
level
Information
management
cost
Sharing of
information
Customer
responsiveness
Information
systems
flexibility
Web-enabled
service and web
application
Flexibility to meet
market changes
Performance
measure
Production
lead time
Inventory
turn-over
Distribution
cost
Sales
Return-oninvestment
Delivery
performance
Lead
time
Return-onassets
On time
delivery
Transportation
lead time
Market
share
Raw materials,
finished goods and
in stock rates
Inventory
level
Inventory
cost
New customer
orders
Rate of
losing sales
Out-of-stock
ratio
Gross
revenue
Lean, agile,
resilient
and green
167
Figure 1.
Performance measures
and supply chain
attributes cause-effect
diagram
IJLSS
2,2
168
+
+
Figure 2.
Performance indicator and
supply chain attributes
relationships
Capacity
surplus
Service
level
Replenishment
frequency
+
+/
+
Inventory
level
Production
lead time
Integration
level
Information
frequency
Lead
time
+
+
+
+
+
C ost
Transportation
lead time
Lean practices
Higher average
utilization rate
Capacity
surplus
+/
Service
level
Replenishment
frequency
Inventory
minimization
Traditional alliance/
higher level of trust,
openess and profit
sharing
Integration
level
Production
lead time
.
.
Shorter lead
times
Transportation
lead time
+
+
+
Cost
169
Information
frequency
Frequent interaction to
spread information
through the network
Lead time
Inventory
level
Lean, agile,
resilient
and green
Figure 3.
Lean practices and supply
chain attributes
relationships
IJLSS
2,2
+
Excess buffer
capacity
Respond quickly
to costumer
needs
170
Agile practices
Capacity
surplus
+/
Service
level
Dynamic alliance/
virtual network
Inventory in response
to customer demand
Integration
level
Replenishment
frequency
Inventory
level
Information
frequency
Supplier flexibility,
speed and quality
+
Total market place
visibility
+
+
+
Lead time
Figure 4.
Agile practices and supply
chain attributes
relationships
Production
lead time
Shorter
lead time
Transportation
lead time
Cost
The agile paradigm prescribes the existence of a capacity excess in the supply
chain resources provoking an increasing in the supply chain capacity surplus.
The reduction of lead time affects negatively the production and transportation
lead times (an increment of lead time reduction provokes a reduction in
production and transportation lead times).
Resilient practices
Capacity
buffers
Replenishment
frequency
Figure 5.
Resilient practices and
supply chain attributes
relationships
Strategic
inventory
Risk sharing
Rapid
configuration
Responsiviness
Capacity
surplus
+/
Service
level
Integration
level
+
Information
frequency
Lead time
Inventory
level
Flexible
transportation
Production
lead time
Demand
visibility
+
+
+
+
Cost
Transportation
lead time
The resilience practices prescribe the existence of a capacity buffer in the supply
chain provoking a increasing in the supply chain capacity surplus.
The rapid configuration affects negatively the production lead time (an
increment level of rapid configuration ability provokes a reduction in the
production lead times. The flexible transport strategy contributes to a reduction
in the transportation lead time.
Lean, agile,
resilient
and green
171
Green practices
Efficiency of
resource
consumption
Capacity
surplus
Reduce
replenishment
frequency
Replenishment
frequency
+/
Service
level
Integration
level
Information
frequency
Reduce redundant
and unnecessary
materials
Enviromental risk
sharing
Inventory
level
Waste minimization
(energy, water, raw
materials, and nonproduct output)
Lead time
Production
lead time
+
+
+
Cost
Transportation
lead time
Reduce
transportation
leadtime
Figure 6.
Green practices and
supply chain attributes
relationships
IJLSS
2,2
172
Capacity
buffers
Efficiency of
resource
consumption
Capacity
surplus
+
+
+
+
+
Cost
+
+
Integrater everse
material and information
flows in the supply chain
Inventory
level
Enviromental
risk sharing
Risk sharing
Dynamic alliance/
virtual network
Resilient practices
Traditional alliance/
higher level of trust,
openess and profit
sharing
Agile practices
Frequente interaction
spread information
through the network
Integr ation
level
+ +
+/
Information
frequency
Replenishment
frequency
Service
level
Demand
visibility
Reduce
replenishment
frequency
Responsiviness
+ +
Respond quickly to
costumer needs
Just-in-time
Excess buffer
capacity
Higher average
utilization rate
Lean practices
Strategic
inventory
Supplier flexibility,
speed and quality
Inventory
minimization
Lead time
Reduce
transportation lead
time
Transportation
time
Shorter
lead time
Waste minimization
(energy, water, raw
materials, and nonproduct output
Rapid
configuration
Flexible
transportation
Production
lead time
Shorter lead
time
Inventory in response
to customer demand
Green practices
Lean, agile,
resilient
and green
173
Figure 7.
Conceptual model with
LARG practices and
supply chain attributes
characteristics
IJLSS
2,2
174
Table III.
Paradigms synergies and
divergences overview
Attributes
Information frequency
Integration level
Production lead time
Transportation lead time
Capacity surplus
Inventory level
Replenishment frequency
Lean
Agile
"
"
#
#
#
#
"
"
"
#
#
"
#
"
SC paradigms
Resilient
Green
"
"
#
#
"
"
"
"
#
#
#
#
#
Synergies
Divergences
There are some apparent divergences in the paradigms deployment; namely, in what is
concerned to the capacity surplus, replenishment frequency and inventory level.
The capacity surplus is an attribute of agile and resilient supply chains, since this
buffer in capacity allows the response to changes in customers needs or to unexpected
events. This does not mean that supply chain should have an enormous capacity
surplus; that would be unacceptable in terms of cost and efficiency. However, existence
of redundancies in critical processes should be considered in conjunction with lean and
green paradigm implementation.
The same question arises with the inventory level (which is another type of
redundancy). The presence of high inventory levels may hide the causes of a bad supply
chain performance and generate materials obsolescence; for that reason, the lean, agile
and green paradigms prescribe the minimization of inventory levels. Even so, if the
inventory of critical materials is maintained in low levels, the supply chain will be more
vulnerable to unexpected events that affect these materials supply. Other conflict is
related to the replenishment frequency, which should be improved to minimize waste
and increase supply chain responsiveness and adaptation. However, an increase in the
replenishment frequency may be obtained through the numerous deliveries of small
quantities to supply chain entities, increasing the number of expeditions and
consequently increasing the carbon dioxide emissions due to transportation. The green
supply chain prescribes a reduction in the delivery frequency in order to reduce carbon
dioxide emissions. However, this could be achieved through not only the delivery
frequency, but using other strategies such as the selection of transport modes with low
carbon dioxide emissions, reducing geographic distances between entities and transport
consolidation, among others.
5. Conclusion
This paper investigated the possibility to merge LARG paradigms in the supply chain
management. These four paradigms have the same global purpose: to satisfy the
customer needs, at the lowest possible cost to all members in the supply chain. The
principal difference between paradigms is the purpose: the lean supply chain seeks
waste minimization; the agile supply chain is focused on rapid response to market
changes; the resilient supply chain as the ability to respond efficiently to disturbances;
and the green supply chain pretends to minimize environmental impacts.
A state-of-the-art literature review was performed to identify each paradigm main
management practices and to support the development of a conceptual model focused
on the integration of LARG practices and supply chain attributes. The main objective
was to identify supply chain practices that should be managed to obtain the necessary
organizational agility, to speed-up the bridging between states that require more or less
degree of resilience, to preserve the dynamic aspects of the lean paradigm and to assure
its harmonization with the ecologic and environmental aspects of production.
A literature review did not reveal the existence of studies combining LARG in
supply chain. Almost researches have been focused on the integration of only a couple
of paradigms in supply chain management, as for example, lean and agile (Naylor et al.,
1999; Vonderembse et al., 2006), lean and green (Kainuma and Tawara, 2006; EPA
United States Environmental Protection Agency, 2007), lean and resilient (Kleindorfer
and Saad, 2005), agile and resilient (Christopher and Rutherford, 2004) or resilient and
green (Rosic et al., 2009).
Since performance measurement and metrics have an important task to identify the
consequences of the paradigms implementation, a review on supply chain performance
measures was performed. A cause-effect diagram was developed to capture the possible
relations between supply chain performance measures and supply chain attributes. In
addition, a succinct study limited to the principal paths between KPI and supply chain
attributes was performed, and provided the following findings: the KPI service level is
affected positively by the supply chain attributes replenishment frequency, capacity
surplus and integration level (however, it is affected negatively by the lead time);
the KPI cost is affected positively by the capacity surplus, inventory level,
replenishment frequency and production lead time(however it is affected negatively
by the transportation lead time; the KPI lead time is positively affected by the
production lead time and transportation time.
Next, the paradigms effect on the supply chain performance was evaluated
developing a conceptual model with LARG practices and supply chain attributes. The
conceptual model development and analysis showed that some supply chain attributes
are positively related to all paradigms; therefore, their implementation creates synergies
among them. All paradigms practices were found to contribute to: information
frequency increasing; integration level increasing; production lead time reduction;
and transportation lead time reduction. Though, there are some apparent divergences
in the application of the paradigms; namely, in what is concerned to the capacity
surplus, inventory level and replenishment frequency. However, capacity surplus
and inventory level increases may provide the supply chain with added agility
and resilience characteristics, needed to respond to changes in customer needs and
unexpected events. The reduction of the replenishment frequency appears to be related
to the concerns of the reduction dioxide carbon emissions in the supply chain.
This paper contributes for research on supply chain management by providing
links between lean, agile, resilience and green paradigms and the supply chain
performance and it identifies synergies and divergences between the paradigms. In
addition, it gives to supply chain managers insights on how the adoption of paradigms
will affect their network, and how it can increase the supply chain performance.
Nevertheless, the relationships established between supply chains paradigms were
established in an anecdotal way resulting from the literature review. Therefore, it is
stressed the necessity to validate the proposed relationships. In terms of testing the model,
different methodologies could be performed as for example by simulation (Venkat and
Wakeland, 2006; Crnkovic et al., 2008) or statistical validation (Agarwal et al., 2006;
Lean, agile,
resilient
and green
175
IJLSS
2,2
Zhu et al., 2008; Routroy, 2009). Authors concluded that the identification of the
conceptual relations among LARG supply chain paradigms is a contribution for the
development of new theoretical approaches and empirical research in the supply chain
management.
176
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About the authors
Helena Carvalho is a Teaching Assistant in the Department of Mechanical and Industrial
Engineering in the Faculdade de Ciencias e Tecnologia, Universidade Nova de Lisboa, Portugal.
Presently she is developing her PhD thesis in the domain of manufacturing lean-and-resilient
systems. She has especial interest in the area of supply chain management, lean, agile, green and
resilient management paradigms, and system modeling. She has several communications in
international conferences proceedings related with these topics, namely in the Proceedings of the
2007, 2006 and 2005 Industrial Engineering Research Conferences and Proceedings of the Third
International Conference on Management Science and Engineering Management. She also has
presented a communication at the Council of Supply Chain Management Professionals Fourth
European Research Seminar. She holds an MSc in Industrial Engineering from the Universidade
Nova de Lisboa, Portugal.
Susana Duarte is a PhD student of Industrial Engineering at Faculdade de Ciencias e
Tecnologia, Universidade Nova de Lisboa, Portugal. Over the past 12 years, her professional
career was always focused on consulting of enterprise resource planning systems
implementation. She has consulted in manufacturing and services sectors where she helped
clients to blend functional supply chain practices with information technology solutions to create
streamlined operations. She holds a degree and also a MSc in Industrial Engineering from the
Faculdade de Ciencias e Tecnologia of the Universidade Nova de Lisboa, Portugal. Susana Duarte
is the corresponding author and can be contacted at: scd@fct.unl.pt
V. Cruz Machado holds a PhD in computer-integrated management (Cranfield University,
UK). He is an Associate Professor of Industrial Engineering at Faculdade de Ciencias e
Tecnologia, Universidade Nova de Lisboa, Portugal. He coordinates the post-graduate
programmes in industrial engineering, project management and lean management. He teaches
courses in operations and production management and has published more than 150 papers in
scientific journals and conferences, in addition to having supervised 50 MSc and PhD students.
His main scientific activities are directed to the design and improvement of supply chain
management. He is the president of UNIDEMI (Research and Development Unit in Mechanical
and Industrial Engineering) and the president of the Portugal Chapter of the Institute of
Industrial Engineers.
Lean, agile,
resilient
and green
179