ABSTRACT
Agile supply chains, which are necessary in more unpredictable market conditions, require excess capacity on standby in order to be in a position to respond quickly. This is the world of Make-to-Order (MTO) or Assemble-to-Order (ATO) compared to the Make-to-Forecast (MTF) world where supply chains flourish lean. For genuine lean supply chains, the value proposition to customers on the demand side is one of providing a standard, consistently reliable, low-cost service, and one which customers can always bank on. Classic lean supply chains are all about 'push', based on forecasts, whereas more collaborative practices allow continuous replenishment supply chains to be a combination of 'push' and 'pull'. This chapter explains the primary focus of suppliers which is on reliable, efficient operations, producing products and services in high volume and low variety, to forecast. It describes the parameter involved in designing and operating lean supply chains, as the author have defined them, come at the cost of reduced agility.
