MODELING LEAN, AGILE, AND LEAGILE SUPPLY CHAIN STRATEGIES

TLDR

Lean and agile supply chain strategies have been debated among practitioners and academics. This research argues that lean and agile need not compete and can be combined as a leagile approach. The study models lean, agile, and leagile applications at a tier‑1 HVAC supplier. Simulations show lean excels in customer service, leagile reduces enterprise inventory, and trade‑offs vary with cost conditions.

Abstract

The merits of lean and agile supply chain strategies have been much debated among practitioners and academics. While these strategies are often viewed as opposites, this research supports the view that they must not necessarily compete and can, in fact, be employed simultaneously through a so‐called “leagile” approach. Lean, agile, and leagile strategies are illustrated by modeling their respective applications at a tier‐1 supplier to the Heating, Ventilating, and Air‐Conditioning (HVAC) industry. Simulation analyses indicate that the lean system excels in customer service performance while the leagile system results in lower enterprise‐wide inventory levels under modeled circumstances. Subsequent analysis suggests that trade‐offs exist among the systems in the base case and under varying cost conditions.