Page 53 - The European Business Review

shape customer criteria of purchase based upon The reduction in supply chain entities – and
actual customer behaviour and respond with highly- concomitant complexity – exponentially shortens
HIÀFLHQW SURFHVVHV ² VXFK DV KRZ =DUD SXWV RXW D IHZ information lead time and increases responsive-
units of various products to see what sells. It’s a self- ness. Reduction in process steps and increased
reinforcing cycle between changing market wants, computer controls will reduce the probability of
ÁH[LEOH SURGXFWLRQ WHFKQRORJ\ DQG WKH PDQDJHPHQW defects, increasing quality. Cost savings will accrue
processes that make everything happen. in raw materials purchasing, labour, energy, trans-
Successful business has always done three things portation, inventory holding and waste disposal.
to create value: connected with the customer to under- Most importantly, customer service will predomi-
stand their needs both in relation to the company nate because changes in demand will be easier to
and to fellow customers; responded to the need by accommodate, parts can be delivered faster due to
developing a solution; and processed LQSXWV DV HIÀ- the batch size of one, and new product develop-
ciently as possible to deliver the solution repeatedly ment time will be reduced.
and consistently. Connectedness, responsiveness, Leagility powers responsiveness and process.
and process are related through a conceptual Value Leveraging the leagile supply chain to enable the digital
Equation where: supply chain requires developing connectedness with
Value = Connectedness x Responsiveness x Process the customer and the customer’s socio-economic
context in order to both anticipate and sense-and-
Digital Precursor: Leagile Supply Chains respond in real time to market demands.
Supply chains use two basic strategies, lean and agile.
Leanness means developing a value stream to elimi- Digital Supply Chain Pioneer: The Case of
nate all waste, including time, and to ensure a level Norsk Titanium Leveraging the
schedule. Agility means using market knowledge and Norway-based Norsk Titanium (NTi) – widely leagile supply
chain to enable
D YLUWXDO FRUSRUDWLRQ WR H[SORLW SURÀWDEOH RSSRU- known as an innovator – represents the chal-
the digital supply
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tunities in a volatile market place. Traditionally, a lenges and opportunities many digital supply chain chain requires
decoupling point separates the supply chain into pioneers are navigating as they discover how to developing
an upstream planning part (lean) and a customer jointly consider connectedness, responsiveness connectedness
with the
facing part (agile). The decoupling point occurs at and process. NTi has developed industrial scale
customer and
the point in the supply chain where the customer 3D printing, a.k.a., additive manufacturing, that the customer’s
places their order for a product. Using information makes titanium parts for aerospace applications socio-economic
enrichment at the decoupling point integrates the with a fraction of the lead time and material waste context
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lean and agile paradigms into a leagile supply chain, of conventional competitors, all while reducing
the precursor to digital supply chains. the cost of titanium parts to the traditional price
Future digital supply chains that maximise the point for aluminum parts. Dr. David Jarvis, former
Value Equation will evolve the leagile strategy to Head of New Material and Energy at the European
the extreme, where the decoupling point will be Space Agency, said, “Norsk’s technology is a good
a production machine with a batch size of one candidate for a manufacturing technology that will
arranged in a dispersed network deployed near change the world.”
customer markets. A set-up time of virtually zero Titanium makes up 14-percent of the weight of
and batch size of one maximises throughput, a Boeing 787, a typical application. Military aircraft
DOORZLQJ D VLQJOH ÀQLVKHG SDUW WR EH VKLSSHG GLUHFWO\ XVH PXFK PRUH WLWDQLXP ZLWK WKH ) ÀJKWHU
6
to the customer rather than waiting for a batch to be containing 39-percent titanium by weight. Global
completed, reducing lead times. DLU ÁHHWV DUH SURMHFWHG WR JURZ SHUFHQW RYHU WKH

Future supply chain strategies will need to concentrate on shared control
of decision making enabled by the application of advanced technologies

to create lasting end-to-end supply chain competitive advantage.

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