The Agile Supply Chain: Competing in Volatile Markets Martin Christopher Cranfield School of Management, UK Turbulent and volatile markets are becoming the norm as life-cycles shorten and global economic and competitive forces create additional uncertainty. The risk attached to lengthy and slow-moving logistics 'pipelines' has become unsustainable, forcing organisations to look again at how their supply chains are structured and managed. This paper suggests that the key to survival in these changed conditions is through 'agility', in particular by the creation of responsive supply chains. A distinction is drawn between the philosophies of 'leanness' and 'agility' and the appropriate application of these ideas is discussed. The importance of time as a competitive weapon has been recognised for some time. The ability to meet the demands of customers for ever-shorter delivery times and to ensure that supply can be synchronised to meet the peaks and troughs of demand is clearly of critical importance in this era of 'time-based competition'. To become more responsive to the needs of the market requires more than speed, it also requires a high level of manoeuvrability that today has come to be termed agility. Agility is a business-wide capability that embraces organisational structures, information systems, logistics processes and, in particular, mindsets. A key characteristic of an agile organisation is flexibility. Indeed the origins of agility as a business concept lies in flexible manufacturing systems (FMS). Initially it was thought that the route to manufacturing flexibility was through automation to enable rapid change (i.e. reduced set-up times) and thus a greater responsiveness to changes in product mix or volume. Later this idea of manufacturing flexibility was extended into the wider business context and the concept of agility as an organisational orientation was born. Agility should not be confused with 'leanness'. Lean is about doing more with less. The term is often used in connection with lean manufacturing to imply a 'zero inventory', just-in-time approach. Paradoxically, many companies that have adopted lean manufacturing as a business practice are anything but agile in their supply chain. The car industry in many ways illustrates this conundrum. The origins of lean manufacturing can be traced to the Toyota Production System (TPS), with its focus on the reduction and elimination of waste. Whilst the lessons learned from the TPS principles have had a profound impact on manufacturing practices in a wide range of industries around the world, it seems that the tendency has been for the benefits of lean thinking to be restricted to the factory. Thus we encounter the paradoxical situation where vehicle manufacture is extremely efficient with throughput time in the factory typically down to twelve hours or less, yet inventory of finished vehicles can be as high as two months of sales – and still the customer has to wait for weeks or even months to get the car of their choice! Whilst leanness may be an element of agility in certain circumstances, by itself it will not enable the organisation to meet the precise needs of the customer moreThe Agile Supply Chain: Competing in Volatile Markets Martin Christopher Cranfield School of Management, UK Turbulent and volatile markets are becoming the norm as life-cycles shorten and global economic and competitive forces create additional uncertainty. The risk attached to lengthy and slow-moving logistics 'pipelines' has become unsustainable, forcing organisations to look again at how their supply chains are structured and managed. This paper suggests that the key to survival in these changed conditions is through 'agility', in particular by the creation of responsive supply chains. A distinction is drawn between the philosophies of 'leanness' and 'agility' and the appropriate application of these ideas is discussed. The importance of time as a competitive weapon has been recognised for some time. The ability to meet the demands of customers for ever-shorter delivery times and to ensure that supply can be synchronised to meet the peaks and troughs of demand is clearly of critical importance in this era of 'time-based competition'. To become more responsive to the needs of the market requires more than speed, it also requires a high level of manoeuvrability that today has come to be termed agility. Agility is a business-wide capability that embraces organisational structures, information systems, logistics processes and, in particular, mindsets. A key characteristic of an agile organisation is flexibility. Indeed the origins of agility as a business concept lies in flexible manufacturing systems (FMS). Initially it was thought that the route to manufacturing flexibility was through automation to enable rapid change (i.e. reduced set-up times) and thus a greater responsiveness to changes in product mix or volume. Later this idea of manufacturing flexibility was extended into the wider business context and the concept of agility as an organisational orientation was born. Agility should not be confused with 'leanness'. Lean is about doing more with less. The term is often used in connection with lean manufacturing to imply a 'zero inventory', just-in-time approach. Paradoxically, many companies that have adopted lean manufacturing as a business practice are anything but agile in their supply chain. The car industry in many ways illustrates this conundrum. The origins of lean manufacturing can be traced to the Toyota Production System (TPS), with its focus on the reduction and elimination of waste. Whilst the lessons learned from the TPS principles have had a profound impact on manufacturing practices in a wide range of industries around the world, it seems that the tendency has been for the benefits of lean thinking to be restricted to the factory. Thus we encounter the paradoxical situation where vehicle manufacture is extremely efficient with throughput time in the factory typically down to twelve hours or less, yet inventory of finished vehicles can be as high as two months of sales – and still the customer has to wait for weeks or even months to get the car of their choice! Whilst leanness may be an element of agility in certain circumstances, by itself it will not enable the organisation to meet the precise needs of the customer more