Agility Strategies and Supply Network Optimisation
Submitting InstitutionUniversity of Exeter
Unit of AssessmentGeneral Engineering
Summary Impact TypeEconomic
Research Subject Area(s)
Mathematical Sciences: Applied Mathematics
Information and Computing Sciences: Artificial Intelligence and Image Processing, Computation Theory and Mathematics
Summary of the impact
Professor David Zhang's research into agility strategies and the analysis
and optimisation of complex supply chain networks in the manufacturing
sector has led to significant economic impact. Reductions have
been made in inventory and cost of goods sold, amounting to an estimated
£80M per annum for CIFUNSA, one of the world's largest engine block
and head manufacturers. The entire senior management team has been trained
in agility strategies and techniques at China's largest non-ferrous metals
research and industry complex GRINM, leading to major corporate-level
restructuring and growth. The senior management of solder-specialist COMPO
has also been trained based on Zhang's research to help the company
quadruple turnover in four years and become global market leader. Finally,
these same strategy and analysis techniques have generated cost savings
and performance improvements worth an estimated £375k for UK engineering
solutions company J+S Ltd (http://www.jands.co.uk).
Zhang, Chair of Manufacturing Systems at Exeter Engineering and Leader of
the Materials and Manufacturing Group (MMG), joined the University in
2000. He served as Director of the Southwest Manufacturing Advisory
Service (SWMAS) from 2001to 2009.
Zhang and his research group focus on both manufacturing strategy and
supply chain optimisation in manufacturing industries, specialising in new
combined agile / lean manufacturing strategies which have been applied to
large multi-national companies and small to medium size enterprises.
Methodology and taxonomy for agility
Zhang's seminal early work [1,2] and its developments in methodology for
agile manufacturing implementation were the first relating the theoretical
concept of agility to practical implementations. The methodology has been
applied in industry and, with the support of several hundred UK companies,
led to the development of a classification theory for agile manufacturing
strategies in 2006 . Contrary to existing holistic concepts of agility,
Zhang's work demonstrated the existence of three distinct agility
strategies and identified the characteristics, business cases for and ways
of delivering these strategies.
For Barnstable-based SME J+S, in 2006, Zhang researched drivers for
agility and the required strategic capabilities, then developed an agility
strategy based on his agility theory. He identified methods, tools and
best practices to be implemented, and aided implementation of these into
practice. This included an adaptive resource and skills scheduling and
planning tool based on his work on dynamically integrated systems .
A Knowledge Transfer Partnership with J+S (2004 - 2006) started with
tailoring of the tools and methods, development of the strategy, and the
implementation of the identified tools and techniques in a chosen business
area. Zhang has worked with J+S through further collaborative projects in
new agility strategies and optimisation with a team of MPhil/PhD
researchers until 2008.
Analysis and improvement of supply chains
Zhang has developed tools and methodologies to analyse complex supply
chains configurations. These use problem solving methods such as swarm
intelligence, multi-agent and ant-colony optimisation that mimic the
behaviour of social insects [4-6] and which can then be directly applied
to manufacturing strategies.
Following research by Zhang's student Luis Moncayo-Martinez (PhD 2008),
the pair worked with CIFUNSA to address the problem of supply chain (SC)
configuration and safety stock placement. They formulated it using an
early ant-colony algorithm with the total supply chain cost (inventory and
production cost) and lead time as factors [5,6]. In doing this Zhang and
his student solved a real-world supply chain problem for one of the
largest foundries in the world.
References to the research
1. Sharifi H, Zhang Z. (2001). Agile manufacturing in practice:
application of a methodology. International Journal of Operations and
Production Management, 21 (5/6), 772-794.
2. Zhang Z, Sharifi H. (2000). A methodology for achieving agility in
manufacturing organisations. International Journal of Operations and
Production Management, 20 (4), 496-512.
3. Zhang, DZ. (2011). Towards theory building in agile manufacturing
strategy: case studies of an agility taxonomy. International Journal
of Production Economics, 131, 303-312. **
4. Zhang, DZ, Anosike A and Lim, MK. (2007). Dynamically Integrated
Manufacturing Systems (DIMS) - A Multiagent Approach, IEEE Trans on
Systems, Man and Cybernetics, Part A: Systems and Humans, 37(5),
5. Moncayo-Martinez LA, Zhang DZ. (2013). Optimising safety stock
placement and lead time in an assembly supply chain using bi-objective
MAX-MIN ant system. International Journal of Production Economics.
145 (1), 18-28.
6. Moncayo-Martinez LA, Zhang DZ. (2011). Multi-objective ant colony
optimisation: A meta- heuristic approach to supply chain design. International
Journal of Production Economics, 131(1), 407-420. **
** Papers that best indicate quality of underpinning research.
Details of the impact
The impact described is strongly economic, with Zhang's research having
direct effect on efficiency of manufacturing operations with significant
and directly measurable financial performance improvements in four
Supply chain optimisation in engine block casting: CIFUNSA
is one of the world's largest producers of gray iron blocks and heads
(200,000 tonnes annually, and even in 2006 had sales of approximately
$1bn) for automotive giants GM, Ford, Chrysler, as well as Toyota, Nissan,
John Deere etc.
Zhang's research into ant-colony optimisation of safety stock placement
and lead time in an assembly supply chain was applied to model CIFUNSA's
highest demand engine block supply chain in 2009. The results were
then adopted by CIFUNSA, leading to on-hand inventory reduction of 20%
between 2009 and 2011. In the same period, the cost of
goods sold (CoGS) was reduced by 10% (a). The foundry process in this
business is very labour-intensive, so a small reduction in CoGS represents
a significant enhancement to the company's earnings of an estimated $100M
Agile business strategy for R&D and manufacturing: GRINM
Beijing General Research Institute for Non-Ferrous Metals (GRINM) started
in the 1950's as a Chinese national research institute providing research
and development support for the non- ferrous metal industry (http://www.grinm.com).
Over the last 12 years, GRINM has been transformed from a state-funded
research organization to an R&D and manufacturing enterprise operating
in the global market. Business agility is an important factor for their
In 2008, based on his research, Zhang was invited to help GRINM
develop an agile business strategy. The deputy general manager of
subsidiary company COMPO visited Zhang at the University of Exeter in 2009,
spending eight months learning about manufacturing strategies, systems and
management, developing expertise in Zhang's agile and lean enterprise
theory. This led to Zhang visiting GRINM in 2010 to work on a
strategy building process and train 82 senior directors and managers (b).
GRINM have continued to apply Zhang's agile process, assisted from 2012
by Rolan Berger (international business strategy consultants) who are
tasked to implement the strategy, with continuing hands on support through
personal visits by Zhang. GRINM estimate Zhang's agile process coupled
with other factors have contributed to turnover rising by over 30% from
RMB 33bn (~£3.4 bn) since 2010, during a period of decline in the
global market for metal products.
Agile business strategy development: COMPO
Beijing COMPO Advanced Technology Co. Ltd was established by GRINM as a
subsidiary in 2005 (http://www.composolder.com),
COMPO is a high-tech enterprise specialising in R&D, production, trade
and services for tin-based solders and non-ferrous new materials.
By 2009 the company realized that its size required an agile and
lean process for managing its strategies, operations, marketing and
systems, and the consequent development of its top management. This
resulted in COMPO's deputy general manager studying at Exeter. On his
return to China in 2010 he applied his training to formulate and
implement a business strategy, with Zhang's direct assistance. Since then
the company has grown its revenue by over 50% annually, with a total
increase of sales by 400%, and profits by 300% (c).
Business strategy: J+S Ltd
Implementation of Zhang's strategy and analysis techniques to J+S Ltd (
has resulted in a direct reductions of stock and work-in-progress levels
by £200k (approximately 2% of turnover), production lead-time by 15%, and
average days late on contracts by 2.8 days. The company's turnover went up
from £9.9m in 2004 when the collaboration first started to £12.8m in 2012
with profit increased fivefold. According to the company's operations
director (d), on a visit to the university in 2010 for further
"we have done extremely well since the scheme thanks to the system
that has been put in place during the collaboration, a recent example is
that we have won a 10 year contract worth over £10m due to the system,
that is why I am here to seek further collaboration".
During the implementation of this strategy 23 company staff including
project managers, engineers, and shop floor supervisors and operators were
trained in the agile and lean techniques.
Impact via Knowledge Transfer Projects
Mr Volata, a KTP Associate with J+S, was subsequently employed in 2007
by the company to manage and implement Zhang's research in the company's
Aberdeen site. Volata joined Knox D'Arcy in 2008, and later KPMG
in 2009 as an operational strategy consultant helping other UK
companies to achieve competitiveness, using the agile and lean strategies
developed by Zhang at Exeter. Since 2009, Volata has used the
agile methodology developed by Zhang and himself to assist international
and UK companies, including Zurich Financial Services, BP, Heineken UK,
Londis, Budgens, Anglo American, Unilever and Thomas Cook.
Sources to corroborate the impact
a) Letter (2011) from Research and Development Manager CIFUNSA. PDF
b) Letter (2013) from Director, Beijing General Research Institute for
Non-Ferrous metals. PDF supplied.
c) Letter (2013) from CEO and General Manager, Beijing COMPO Advanced
Technology Co., Ltd. PDF supplied.
d) Quote (2010) from J+S Operations Director.