Managing supply chain changes with agile methods : A case study in global spare parts business

Abstract

Global business and turbulence in supply chains has raised the need for agility in supply chains to respond to changing environment and customer needs. In the literature it has been argued that one path to supply chain agility would be building reactive mechanisms to supply chains that enable customer sensitivity and changing of supply chains. In software development, the issue of chancing customer needs was tackled with agile development (Agile). It focuses on human collaboration in delivering customer value incrementally, which allows frequent feedback that guides the development to suit chancing needs. In general, it is argued that Agile suits an environment with complex and evolving problems, and in the recent years, Agile’s principles have been successfully adopted to contexts other than software development. For Agile to work, top management needs to put customer needs to the forefront and empower employees to make customer value creating decisions based on managerial guidance. For such actions, literature reports on three types of Agile adoption obstacles: process obstacles, business obstacles, and people obstacles, with the latter having most attention and emphasis. Agile and supply chain agility seem to be built from similar principles, but literature on their relation doesn’t seem to exist. In this study it is assumed that Agile could be utilized to form the previously mentioned customer sensitivity mechanism by applying it to supply chain change practices. However, before adoption of Agile it is recommended that a pre-assessment is conducted, for adoption of new methodologies would be an investment of time and resources in companies. Therefore, this study investigates what obstacles there might be in Agile adoption for supply chain changes. The study is conducted as a single case study in a global spare parts business company (Company X), where the characteristics of spare parts business and turbulence in global supply chains are causing challenge. In practice, the current practices for supply chain changes are first studied with interviews, after which a Scrum based model for the changes is formed. Next, the existence of possible Agile adoption obstacles is investigated by interviewing function representatives on Agile and the developed model. The results show that the main obstacles for adoption are related to communication and information sharing, the desynchronization of Agile and traditional work, and feedback culture. In general, many of the obstacles derived mainly from software development literature, seem to be present in the context of supply chains. It was suspected that the obstacles are connected to a lack of common view and common goals on supply chains in Company X functions. However, as benefits, the model was seen to introduce clarity, transparency, and rigidity to supply chain changes in Company X, which may help in addressing the adoption obstacles. The study hints of Agile’s suitability to supply chain configuration changes, and it also made interesting findings on the possible effects on value creation, when an Agile team is having too many stakeholders. Confirming the findings requires further research. To address the obstacles in Company X, current processes need to be first mapped in collaboration with Agile experienced people, to set the scope and functions for the adoption. The benefits of Agile need to be communicated to the top management, who need to be convinced to drive the change in the organization. They are also needed to create a common view and goals on supply chains and help build a culture of feedback to support Agile functionality. Additionally, it is recommended to start Agile as pilots with important business units, that can be later used as change agents to positively influence other functions, as the adoption is continued.