2. Critical success factors in agile supply chain management
Introduction
This research paper analyses result from a survey of 962 Australian manufacturing companies in
order to identify some of the factors critical for successful agile organizations in managing their
supply chain. The type of research they conducted is exploratory and the data collection method
used was questionnaire survey.
Method and procedure followed
Total 246 questions were developed by the academics, site manager and prominent members of
the Australian Quality Award Foundation and surveyed 3000 sites in which got 962 response.
Questions were based on degree to which best practices had been adopted, implemented and
developed and extend to which organizational performance had been affected.
As a part of the study, total 43 variables found relevant to agility, supply chain management
practices:- separated in to independent and dependent variable. The independent variable group
subjected to factor analysis and formed 7 factors; they are 1) Participative management style 2)
Computer based technology 3) Resource management 4) Continuous improvement enablers 5)
Supplier relations 6) JIT methodology 7) Technology utilization. The dependent variable
identified are 9 ,they are:- 1)Customer satisfaction 2)Average process change over time
3)Productivity 4) Delivery in full on time 5)Relative technological competitiveness 6) Ratio of
average sales to average total stock 7) Process technology 8) Ability to develop new product and
9)Product innovation.
From the original data set of 962 companies two subset were isolated and named as “more agile
companies” and “less agile companies” based on the mean value 3.5 obtained from 3 sets of
Likert scale variable in which variables are related to practices and outcomes associated with
agility .
Followed by this multiple regression models were developed for each of the 7 independent
factors and 9 dependent variables. The primary reason for using this method was to generate the
3. value for R, R square, and adjusted R square for comparison of strength of relationship and
strength of contribution of variance.
Conclusion
Analysis of survey result provided some interesting insights in to factors differentiation “more
agile” companies from “less agile” organizations.
1).“More agile” companies are more customer focused, and applying a combination of soft and
hard methodologies in order to changing customer requirements.
2). They also see the involvement of supplier in this process as crucial to achieve the customer
satisfaction.
3).They are using technology to promote productivity, new product development, and customer
satisfaction.
The “less agile” group can be characterised as
1).More internally focused with bias towards internal operational outcome.
2). They see no link between any of the independent variable and innovation and appear to see
technology as more closely related to the promotion of the operational outcome than to customer
satisfaction.
3).The role of the supplier for this group is to support productivity and process improvement
rather than to promote customer satisfaction.
Reference:Damien J Power. Amrik S sohal. Shams-Ur Rahman. (2001). Critical success factors in agile
supply chain management: An empirical study. International journal of physical distribution &
logistics management.VOL 31. Issue no 4.
