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What is Agile Manufacturing? (A Complete Guide)


Agile manufacturing is a manufacturing methodology that places an emphasis on being able to quickly meet changing customer demands, needs or wishes, creating a competitive advantage from speed, response, and agility.

As customers expect higher standards with regard to delivery times and the customisation of products and services, agile manufacturing allows companies to take advantage of short windows of opportunity while also delivering more efficiently and flexibly than the competition.

This is achieved with tools, technologies, processes and training, as well as enabled staff who can use their expertise to respond to requirements while controlling quality and production costs.


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How does it Work?

Agile manufacturing works by using product design methods, technologies, close cooperation with the supply chain and corporate partners, employee training, and the involvement of the entire company to respond rapidly to changes in the market or customer needs.

Each of these factors are important to creating an agile manufacturing environment, as follows:

1. Product Design

As consumers demand a larger amount of personalised items and product iterations all delivered rapidly, an agile organisation is able to design production processes so that production schedules can meet any market demand variables. 

2. Technologies

Responding to market demands requires technological support to allow an accurate, real-time flow of information between departments. The sales teams, customer services agents, production line staff and warehousing all need to be aligned and informed of the latest changes or market information. With a common database of parts, products, production capacities and any problems, staff at any level are kept informed and are able to fix problems higher up in the production process, when they are likely to be less costly.

3. Supply Chain / Partner Cooperation

Having good working relationships with your suppliers and partners is vital for an agile manufacturing operation. Suppliers will need to be kept informed of production flow information just as your internal staff do, so they can respond to the needs of end users too. Your network of suppliers and related companies must be strong enough to react should there be a need to negotiate new agreements, arrange material deliveries, retool facilities and take other steps in line with customer demand.  This cooperation means that the agile manufacturer can quickly increase the production of items with high consumer demand and address redesigns speedily to resolve issues or improve products.

4. Employee Training

Employees working in an agile manufacturing environment may need to learn new production processes to align with a customer-driven outlook. Staff need to understand the reason for changes to production schedules, designs and products as well as attain the skills to work in teams to solve problems or  unexpected challenges as they occur.

5. Company Involvement

To be truly agile, a company needs buy-in and involvement at all levels, which often requires a shift in organisational structures too. The company structure needs to support and empower teams to work autonomously to adapt to demands, enabling staff to work together and use their expertise with a ‘bottom-up’ approach. Allowing staff on the shop floor to directly report any challenges or innovations as well as enabling them to make decisions based on wider company information and production schedules may require a change in culture from a ‘top-down’ approach. There may be other wider shifts in the culture of your company, such as moving towards a more localised manufacturing approach in order to better adapt to shifts in the market and deliver personalised products and services quickly.

Lean Vs Agile?

Before going further into agile manufacturing, we need to quickly mention lean manufacturing.

It is easy to get agile manufacturing mixed up with lean manufacturing, which involves a focus on eliminating waste from a manufacturing process in order to reduce costs, improve production efficiency, and increase value for the customer.

Lean manufacturing steps include removing excess inventory, creating continuous production flows, organising staff shifts, streamlining the manufacturing process, minimising defects and waste, and using just-in-time materials delivery to lower costs and reduce lead times.

Agile manufacturing is closely related to lean manufacturing and often uses many lean techniques. However, agile includes the extra dimension that, as well as cutting costs and improving processes, it must react quickly and efficiently to customer demands.

A blended, hybrid lean-agile strategy will bring together both aspects, reducing costs and waste while providing continuous improvement, speed, flexibility and customisation.

Agile manufacturers can employ many of the techniques used in lean, but agile differs in that its real driver is being able to adapt to change quickly.

To find out more, let’s take a look at the history of agile…

The History of Agile

The roots of agile manufacturing go back across decades of information technology and software development, leading to the development of the ‘Agile Manifesto’ in 2001. 

As PC computing grew in the early 1990s, a software development crisis began to emerge. Called the ‘application development crisis’ or ‘application delivery lag,’ the problem was the amount of time it was taking to deliver a new software application was about three years. Of course, this was nowhere near fast enough to keep up with changing requirements, systems or even entire business models, leading to many software development projects being cancelled part way through.

This three-year delivery lag was even longer in industries including aerospace and defence, where the time to delivery could be 20 years or more. For example, the 1982 Space Shuttle Programme was still using information and processing technologies dating back to the 1960s.

In the early 1970s, in an attempt to create a planned development approach, software engineering borrowed much of the design and building processes from physical engineering. This created what became known as the waterfall methodology, which used clearly defined phases of application development, covering requirements through to deployment. Each phase was completed in sequence before the next could begin, which made it difficult to go back and correct problems further up the chain. This problem was made worse by delivery schedules and budgetary constraints, meaning that teams had to stick with decisions made earlier in the process. This lack of flexibility had the knock on effect of leading software developers to spend more time planning, further increasing lead times.

It was clear that the models created for physical engineering were not working for the fast-paced world of software development. The requirements in traditional engineering, such as to build a bridge, rarely change as rapidly as those for software, which often also requires testing and improving during the development cycle.

The US Government, who were the largest software developer in the world at the time, also drove the proliferation of the waterfall technique, with the Department for Defence favouring a waterfall approach until the late 1990s.

Attempts were made to come up with alternative processes, including the development of the ‘Scrum’ process. Taking its name from Rugby, Scrum gave teams objectives rather than assignments and the freedom to achieve them in a given period.

Meanwhile, other industries were also feeling the effect of delivery delays, especially those like communications, automotive or aerospace that often included a software aspect.

Aerospace engineer, Jon Kern was feeling frustrated with the length of these lead times and the fact that the waterfall methodology made it difficult to adapt a project later in the cycle. He was one of 17 like-minded professionals who began meeting to discuss the problem and try to find a solution.

The breakthrough came in 2001 at the ‘Snowbird’ meeting in Utah, when terms like ‘light’ and ‘lightweight’ were being used to describe a new process that would deliver software faster while also allowing for rapid customer feedback during the development process. This created the key tenets of the agile movement – understanding and being able to respond rapidly to customer needs.


Using an agile approach has spread from software and manufacturing to performance management and beyond. A growing number of companies are implementing agility in their working culture and processes, as the benefits of meeting customer requirements faster than the competition are realised.

For example, in manufacturing, Dell Computing used an agile enterprise resourcing system to integrate seven manufacturing facilities and outsourced operations, replacing 75 different operational and IT applications. This improved reliability and reduced downtime in one of the factories by 75%. By running an agile operation from raw materials to production, shipping and customer service, Dell were able to react to market demands while also reducing their IT costs by $150 million.

Elsewhere, agile performance management has been used at businesses including the Clydesdale and Yorkshire Bank, General Electric, Adobe and Accenture. They all switched to agile approaches, finding that flexible systems with continuous feedback between staff and managers provided better performance, more engaged employees, and improved innovation and teamwork compared to the ratings-based, bureaucratic, and overly complex approaches they took before. Accenture recognised that their old system rewarded employees who were “the most narcissistic and self-promoting,” so shifted their focus to improving employees by developing performance rather competing with colleagues.

Agile manufacturing is also behind the UK’s 3-Day Car Project and the EU’s 5-Day Car Project. These aim to create a build-to-order system for automotive manufacturing whereby a vehicle is ordered, made and delivered for a specific customer in a matter of days. With the average manufacturing time for a car sitting at around 1.5 days, this is an attainable goal, with the agile approach expected to provide a large competitive advantage to the company to achieve it first.


When to use Agile Manufacturing?

Not every business is ready to implement agile methods but, generally, it is worth assessing your customer order cycle (how quickly your customers need products) and the lead-times of your suppliers. If your supplies have a short lead-time, you can use lean manufacturing and if the customer order cycle is short, agile production will be beneficial.

However, you must be willing to implement a change in your organisation’s mindset to support an agile manufacturing methodology. If you don’t adapt your structure and processes to an agile structure, you can unwittingly end up hurting your production development. Ideally, agile manufacturing systems will thrive where low volume production is coupled with a high requirement for variability.

How do you Implement Agile Manufacturing?

As noted above, introducing agile manufacturing requires a change not just in technologies and processes, but also in the organisation, culture and purpose of your company. Without this reorganisation, agile procedures cannot flourish.

There are a number of factors that are needed to create agile manufacturing, but fortunately they work together to support the overall agility of your organisation, starting with:

1. Organisational Culture and Purpose

Agile culture is based around people and agile organisations need to be structured to allow team members ownership and control over their work. Rather than ruling over their employees, managers in agile organisations provide the workforce with the tools to work autonomously and achieve results.

Teams are goal-orientated and accountable for achieving them, with each goal fitting into a wider purpose. Understanding this wider purpose and where they fit in helps improve the motivation and engagement of employees and will also increase productivity.

The wider cultural shift means that agile manufacturers favour a bottom-up approach, where ideas flow through the company rather than being passed from the top down. This way, those on the shop floor who are closest to manufacturing challenges can have a voice and make a real impact. This improved engagement creates an innovative and joined-up workforce who collaborate flexibly across departments and levels of seniority.

2. Empowered and Open Network of Teams

As noted above with an agile culture comes the need to empower your teams. They need to be accountable but also able to collaborate freely and with transparency. It is important that the work environment has a knowledge culture, where ideas can be shared and insights gained from other teams too.

3. Technologies and Tools

Technology is vital to an agile manufacturer as it allows companies to work efficiently and deliver quickly to keep up with market changes and customer demand. Real time communication, organisational flow management tools, and interactive and accessible digital work schedules and instructions are all examples of technologies and tools that can help create an agile environment. However, the key is choosing the right tools to improve your own unique processes, products and staff.

Where automation involves replacing workers with machines, augmentation is about enhancing the capabilities of employees with the right technologies. Augmentation is important in agile manufacturing as it believes that technology can help workers do more, better.

4. Flexibility

Having the right culture, technologies and teams creates a flexibility in the company that allows it to quickly adapt to change. This includes being able to respond to external factors such as economic, political, social, technological or environmental changes. Being able to adapt each component of a system in the face of such changes is part of having an agile manufacturing system.

5. Faster Iterations through Short-Term Goals

Agile manufacture is all about being able to quickly cycle through multiple iterations of a process or product. This is achieved by teams focusing on measurable, short-term goals that can be adapted quickly and repeated, combining to create the whole. Each iteration allows for small improvements to be made as different solutions are tested and data is gathered on the effects of different variables.

Companies aiming to turn to agile manufacturing can get advice from specialists who help companies convert their systems to agile ones. Alternatively, there are textbooks and manuals available to provide guidance on agile manufacturing techniques and approaches.

Where is Agile Used?

Originally used in software development, agile has spread to other industries and applications due to its ability to enable teams to quickly model solutions, incorporate feedback, and adjust scope as needed throughout a project’s lifecycle. Speeding up delivery times while supporting changing requirements through the use of agile methods has meant that it is now also used in areas where:

  • Teams handle fast-changing deliverables, such as with technology products
  • Teams work on projects that evolve or do not have a clear scope and requirements from the start
  • Teams work closely with customers and other external parties throughout a project
  • Teams need a method for continual advancement to emphasise process and product improvement
  • Teams need to bring numerous interdependent tasks together and communicate to ensure success 
  • Teams create prototypes ahead of the final project outcome 
  • Teams receive rapid feedback from each product iteration before creating a new draft

Where did Agile come from?

As mentioned in the history section above, agile was created by software developers who came together to find a solution to the long lead times and failed development projects that were plaguing the software industry.

The innovative new approach was created between 11 and 13 February at The Lodge at Snowbird ski resort in the Wasatch mountains of Utah, where seventeen people devised the Agile 'Software Development' Manifesto.

This new agile way of working replaced the sequential and linear ‘waterfall’ process to create a system where interactions between individuals and teams were prized, including an ongoing relationship with suppliers and customers. Self-organised teams are given goals that allows for a product or service to be modified according to customer feedback.

Improving collaboration and reducing time to market, the agile methodology has been adopted by development teams around the world, both within and outside of software development.


Agile manufacturing involves a focus on meeting the needs of customers while controlling costs and maintaining quality. This means it is suitable for organisations working in competitive environments where small improvements in performance and product delivery can greatly improve competitiveness and reputation.

Agile manufacturing allows companies to adapt to changing global circumstances or the requirements of customers, staying ahead of the competition and remaining at the forefront of customers’ minds. Agile manufacturing meets the desires of consumers for new and customised products, choice, and fast delivery times.

Based around local, small sized teams, the benefit of agile manufacturing is that you can quickly respond to customer needs to provide different products, adapt products quickly to changing needs, and provide personalised solutions that are difficult to achieve with large, distant manufacturing set-ups.

Of course, agile is finding use in other areas too – such as H.R. and performance management, with more frequent meetings between staff and managers and less formal paperwork creating more adaptable teams and closer working cultures.

The agile approach has proven its worth. It decreases costs and time to market. It also increases cross-functional collaboration, revenue growth, and customer satisfaction, while mitigating risk because teams take multiple low-stakes decisions rather than a big, high-stakes one. Regularly delivering small pieces of value reduces the risk that a final product doesn't meet customer needs.

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