Introduction
Operations management is a subfield of management concerned with methods and strategies aiming at increasing the efficiency of an entity or a business unit. The rapidly changing external environment prompts companies to reject traditional management methodologies and locate the new strategies that would facilitate waste reduction, boost performance, and avert a crisis. In recent years, there has emerged a modern management paradigm entitled LARG, which stands for Lean, Agile, Resilience, and Green.
It is argued that these four approaches – leanness, agility, resilience, and greenness – are to propel economic growth and prosperity. Some researchers show that these concepts cannot be treated distinctly as their respective philosophies are overlapping in many areas. This paper discusses and compares three out of four principles – Lean, Agile, Resilience – and concludes their compatibility with operations management.
Lean
Lean was first developed in the 1950s at Toyota Motor Company, Japan. The primary goal of lean was identified as locating and eliminating waste in business and manufacturing system. The lean principle argued that improving performance was impossible without eliminating hurdles and barriers (Noda, 2015). Over the years, the lean philosophy found recognition in many other industries across the board and was largely adopted in Western countries.
The effectiveness of lean technologies hinges on empirical evidence. Several research studies have shown that companies that embraced the lean philosophy were able to improve the quality and productivity as well as enjoy better customer responsiveness (Piercy and Rich, 2015).
It is important to mention that leanness does not only apply to manufacturing itself; instead, it should be an overarching strategy for the entire supply chain. Lean manufacturing is a radical process that affects all the aspects of a company starting with manufacturing and ending with sales, marketing, quality assurance and others (Bhasin, 2012). For this reason, lean seems to be compatible with operations management. Besides, what the lean philosophy proclaims is joint accountability for the outcome. In those companies that dismiss lean principles, departments often tend to operate independently, only caring about their own results (Rahman, Laosirihongthong, and Sohal, 2010). After the introduction of lean, different parts of one entity have the potential to unite and lift up one another.
Agile
Agile is another management methodology that has so far been the most prominent in software development. The agile manifesto, the document that outlines the principles of the methodology, states the importance of customer collaboration, interactions, working products, and rapid response to changing requirements (Augustine et al., 2005). At present, agile permeated the software industry and is currently adopted by other fields as well (Boehm and Turner, 2005).
Probably, the main reason why agile principles fit with operations management is because they provide a framework for how to deal with changes. As it has already been mentioned, today, companies operate in an increasingly volatile environment (Cervone, 2011). This kind of environment rarely allows for linear, sequential development of a product because of changing requirements and other reasons. Agile shows that it is possible to readjust the process to factor in all the variables and bring about a positive outcome.
Lean and agile overlap in terms of their focus on increasing efficiency. For instance, agile prefers a working product over comprehensive documentation with the latter potentially being “waste” within the lean paradigm. However, lean and agile differ in application: firstly, they address different problems – waste and volatility, respectively. Secondly, as lean was successfully tested on big business projects while agile often crumbles when confronted with a large, rigid structure of a business entity.
Resilient
Akin to lean and agile, resilience management deals with efficiency and productivity but from a different standpoint. If agile seeks to bring about improvement, resilience aims at averting risks or dealing with adversity. Linkov et al. (2014) compare a business entity to the human organism. The researchers state that while the human body has an immune system and recovery resources that help it restore after an injury or an illness, companies do not function this way.
A crisis or any other significant adverse event can put a company out of order for good. Therefore, it is essential to steer the course of action in the right direction and prevent adversity from happening. Boin and McConnell (2007) state that the power of resilience in preparing a company for a crisis that is difficult or impossible to predict. It is done by enhancing communication and connectivity within the networks – both from technological and social standpoints. In this way, companies are being proactive: they do not handle the outcomes but acknowledge the uncertainty and prepare for the worst.
Conclusion
In this day and age, companies are growing increasingly aware of the need to integrate and develop competitiveness elements in their business structures and operations to aid their situation on the market. Lean, agile, and resilient are three out of four elements of the new management paradigm, LARG. Each philosophy has its own set of rules, some of which overlap with other sets and some do not. Fundamentally, lean, agile, and resilient all have the potential to improve operations management. However, it should be noted that it might be not exactly sufficient to rely on only one framework as they deal with different problems of varying scope.
Lean stems from manufacturing and seeks to avoid waste. Agile teaches managers to overcome and harness volatility and make readjustments. Resilience is an indispensable part of crisis management and a proactive strategy. What unites lean, agile, and resilience is that they capitalize on communication and constant interactions between people.
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