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Critical success factor in agile supply chain management

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Critical success factor in agile supply chain management

  1. 1. Research Paper Review:Critical success factors in agile supply chain management
  2. 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. 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.

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