Effectiveness of agile management in the production chain model

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Effectiveness of agile management in the production chain model

K. Belous . Belous, PhD, Associate Professor, Associate Professor of the Department of Management and Marketing, Odessa National Maritime University , O. Baklanova KO. Baklanova,PhD in Economics, Associate Professor of the Department of Management of Foreign Economic Activity of Enterprises, National Aviation University , V Nahornyi V Nahornyi, PhD in Economics, Associate Professor of the Department of Economics, National University of Life and Environmental Sciences of Ukraine

Анотація

Ефективність agile-менеджменту у виробничій ланцюговій моделі

К. В. Белоус,

к. е. н., доцент, доцент кафедри менеджменту і маркетингу, Одеський національний морський університет,

к. е. н., доцент, доцент кафедри менеджменту зовнішньоекономічної діяльності підприємств, Національний Авіаційний Університет

к. е. н., доцент кафедри економіки, Національний університет біоресурсів і природокористування України

У практиці формуються та успішно функціонують різні типи виробничих ланцюгових моделей, характеристики яких поступово ускладнюються. Враховуючи виокремлену специфіку, Agile-менеджмент наразі є важливою складовою сучасних виробничих ланцюгових моделей, що постійно адаптується до їх зростаючої складності та змін у бізнес-середовищі.

Відповідно до наведеної актуальності та дослідницької проблематики, метою статті є вивчення специфіки формування та змісту поглядів на ефективність Agile- менеджменту у виробничій ланцюговій моделі.

Результати дослідження свідчать про те, що погляд на ефективність Agile-менеджменту може бути різноманітним, оскільки він формується в залежності від конкретних вимог та особливостей виробничої ланцюгової моделі. Зроблено висновок, що якщо важлива гнучкість та здатність швидко адаптуватися до змін, то погляд на ефективність Agile-менеджменту спрямований на ознаки гнучкості виробничої ланцюгової моделі. Якщо важливо швидко випускати нові версії продуктів та поступово їх вдосконалювати, то ефективність Agile-менеджменту визначається здатністю забезпечити інерційність та інкрементальний розвиток виробничої ланцюгової моделі. Якщо важливе чітке розуміння вимог замовників та швидке прийняття рішень, то ефективність Agile-менеджменту виробничої ланцюгової моделі визначається її прозорістю та рівнем взаємодій у форматі «клієнт-виробник». Якщо для виробничої ланцюгової моделі важливе досягнення виробничих цілей та активна участь замовників у визначенні цільових пріоритетів, то погляд на ефективність Agile-менеджменту спрямований на інтегрованість замовників у процес розробки кінцевого продукту. Якщо для виробничої ланцюгової моделі важливе підтримання культури безперервного вдосконалення або оптимізація окремих процесів, то погляд на ефективність Agile-менеджменту спрямований на ознаки їх постійного вдосконалення. Враховуючи зміст сформованих положень, подальші перспективи дослідження полягають у формуванні теоретичної бази для подальшого вивчення впливу Agile-менеджменту на конкретні показники ефективності в різних виробничих ланцюгових моделях.

Ключові слова: Agile інструменти; Agile-методології; виробничі операції; ітерації у роботі.

Abstract

Thus, the conclusion is drawn that if flexibility and the ability to adapt quickly to changes are crucial, the perspective on the effectiveness of Agile management is directed towards these flexibility features in the production chain model. agile management business competitiveness

Keywords: Agile tools; Agile methodologies; production operations; iterations in work.

Introduction

Target setting. Currently, there is a growing trend towards the development of production chain models that function as complex structures focusing on the processes of organizing the production and supply of products, goods, or services. These models are oriented towards the stages from the initial production phase to delivering the production results to the end consumer.

It is important to note that currently, various types of production chain models have formed and are successfully functioning in practice, and their characteristics are gradually becoming more complex. This complexity can vary depending on the specific industry, business model, or type of production. An important aspect is the emphasis on the staged nature of production. Additionally, some companies may employ a hybrid approach by combining various Agile methodology tools with the structure of the cascade model for specific aspects of their production process.

Considering the outlined specificity, Agile management has become an essential component of modern production chain models, constantly adapting to their increasing complexity and changes in the business environment.

Analysis of research and publications. Currently, the challenges of Agile management in the production chain model are thoroughly explored by Yakubenko I.M., Kopishynska K. O., Bezdolna O. A., Mokhonko G. A. Significant contributions to the analysis of Agile tools have been made by Khomych O. V., Artemenko L. P. It is also worth noting that Christopher M. has made a substantial contribution to the identification and description of approaches to Agile management and the specifics of combining Agile methodology tools.

However, in the current dynamic environment, it is crucial not only to focus on the methodology or individual Agile tools but also on the systematic analysis of the effectiveness of Agile management in the production chain model. It is because the existing Agile methodology is becoming increasingly unique, effectively incorporating adaptive, iterative, communicative, goal-oriented, optimization-oriented, cyclical approaches, and a self-organizing approach simultaneously. It is achieved through the flexibility inherent in its associated tools.

The wording of the purposes of article (problem). By the relevance and research issues, the purpose of the article is to study the specifics of the formation and the system of views on the effectiveness of Agile management in the production chain model.

The paper main body with full reasoning of academic results

Certainly, it's important to highlight that a multitude of companies spanning diverse economic sectors leverage production chain models to structure their manufacturing operations and product or service supply. Prominent examples encompass Toyota, Apple, Procter & Gamble (P&G), General Electric (GE), and Zara (Inditex). The specificity of these models, as outlined in Table 1, entails variations in types and structures influenced by industry, company size, regional characteristics, and other factors.

Table 1. Analysis of the typology and structures of the production chain model

Note that these are just a few examples. Currently, numerous companies utilize diverse and sometimes unique production chain models to optimize operations and achieve strategic goals.

Considering the given statements, the diversity in production chain models and their management approaches tailored to each company's individual needs and strategies indicates increasing adaptability and flexibility. It enables a timely, high-quality, and operationally efficient response to changes in the business environment. Thus, Agile management in the production chain model is oriented towards an increasingly broad spectrum of approaches, including adaptive, iterative, communicative, goal-oriented, optimization-focused, cyclical, and directed towards self-organization.

It is because, in Agile, there is no single approach that prescribes to the owner of the production chain model the ways for the most optimal utilization of available tools for the effective implementation of adaptive and iterative approaches (including communicativeness, goal setting, process optimization, cyclic improvement, and fostering self-organization within the team, etc.).

Moreover, they are not needed to that extent (as the management needs of owners of such a model are unique, and perspectives on their effectiveness are inconsistent).

Note that each of the Agile management approaches in the production chain model is a structure that operates under a flexible set of similar Agile tools (including Scrum, Kanban, Extreme Programming (XP), Lean Thinking, Feature-Driven Development, Crystal, Agile Modeling), as illustrated in Table 2.

Table 2. Characteristics of approaches to Agile management in the production chain model

Note / * The tools: Scrum, Kanban, Extreme Programming (XP), Lean Thinking, Feature-Driven Development, Crystal, Agile Modeling

Source: formed based on [1-3; 5]

The data presented in the table indicate that each approach is composed of a specific set of tools, applied based on the needs and capabilities to maximize efficiency, as interpreted by us through the ability to achieve strategic goals and optimize production, logistics, and other processes in the production chain model.

For example, the Scrum tool can be used to launch production or logistical iterations, typically lasting 2 to 4 weeks, forming small, self-contained teams working in sprints (i.e., the team's work lasts for 2 to 4 weeks), creating a facilitator who helps the team implement Scrum in the breakdown of the final product or addressing a specific production problem [4].

The Kanban tool can be used to track a set of production or logistical tasks on a board, where each card represents a separate task, to limit the number of tasks that can be in progress simultaneously, or to define metrics for measuring the speed of task movement through the system [1-2].

Extreme Programming can be used for product development by two manufacturers to improve its quality or ensure compliance with customer requirements.

Lean Thinking can be used to eliminate waste, unevenness, and overload in the production process or analyze a specific workflow to identify and eliminate unnecessary steps [3; 6].

Feature-Driven Development (FDD) is used to define the structure of a specific production program, distribute production functions, or allocate responsibilities for producing a product among factories based on their expertise. Crystal can be used to adapt to different projects and teams based on customer or market requirements to facilitate self-assessment and improvement of teamwork in a specific direction [6].

Agile Modeling is used to create diagrams and interaction models within a team, engaging stakeholders in the modeling process. These tools are just a few among many that are variously composed and utilized in Agile management [4-5].

The format of composing and using these tools depends on the accepted view of Agile management effectiveness in the production chain model (Figure 1).

If the production chain model must adapt quickly to changes in the business environment, market requirements, and technological innovations, the perspective on the effectiveness of Agile management is focused on the flexibility features of such a model, particularly how responsive it is to changes in demand, the competitive environment, and other factors.

If it is crucial for the production chain model to quickly release new product versions to the market, gradually improving them, the perspective on the effectiveness of Agile management is focused on characteristics of inertia and incremental development.

This initiates and progressively alters the process iterations for the step- by-step enhancement of the product.

Figure 1. Possible perspectives on the efficiency of Agile management in the production chain model

Source: formed based on [2; 5-6]

If a clear understanding of customer requirements and rapid decision-making is crucial for the production chain model, then the perspective on the efficiency of Agile management is focused on transparency and interaction characteristics (as effective and frequent communication within the team and with stakeholders is essential).

If achieving production goals and active customer involvement in determining target priorities are crucial for the production chain model, then the perspective on the efficiency of Agile management is directed towards the integration of customers into the development process, which is the foundation of the model.

If maintaining a culture of continuous improvement or a focus on optimizing specific processes is crucial for the model, then the perspective on efficiency is directed towards the characteristics of continuous improvement, the effectiveness of the model, and the results of process improvements.

Therefore, overall, the efficiency of Agile management in the production chain model is determined by the company's ability to quickly respond to changes, maintain a high level of product quality, and ensure a high level of customer satisfaction.

According to the perspectives on the effectiveness of Agile management in the production chain model, its pyramid is quite diverse in terms of characteristics related to the optimization of production, logistics, and other processes, as exemplified by Zara and General Electric (GE) (Figure 2).

Figure 2. The pyramid format of Agile management effectiveness for Zara and General Electric (GE) based on the characteristics of the optimization of production, logistics, and other processes.

Source: formed based on [4]

According to Figure 2, it can be noted that some of these characteristics include [4]:

1. Responsiveness to changes is present if an Agile team can quickly adapt to changes in market demands, technologies, or company strategy.

2. Regular delivery of value in the production chain model is achieved when each participant in the chain can adjust their activities to the release of new versions of products or services that bring real value to users.

3. Customer satisfaction is present if Agile processes ensure the satisfaction of the needs and expectations of customers and end users.

4. High product quality is present if Agile processes ensure high-quality standards and the conformity of the final product in the production chain model to these standards.

5. Effective resource utilization is present if there is optimal use of resources (particularly if unproductive expenditures are absent).

6. Flexibility in planning is present if Agile processes ensure the agility of management teams to easily adapt (in terms of planning) to changes in project conditions or the business environment.

7. High team productivity is present if Agile processes contribute to the creation of highly productive teams.

8. Team self-organization capability is present if Agile processes contribute to the creation of teams capable of making decisions and solving production, logistical, integration, and other tasks independently, ensuring flexibility and speed of execution.

9. Regular process improvement is present if Agile teams systematically monitor improvement opportunities and implement changes.

10. Open and effective communication is present if Agile processes contribute to creating communication that ensures clarity and interaction among all participants in the model chain.

In fact, in any format, effectiveness pyramids in the production chain model ensure the alignment of its core processes (production, logistics, and others).

Conclusions from this study and prospects for further exploration in this area

The research results indicate that assessments of the effectiveness of Agile management in the production supply chain model can vary depending on specific requirements and characteristics of model. The conclusion has been drawn that:

1. If flexibility and the ability to adapt quickly to changes are crucial, then the assessment of Agile management's effectiveness is focused on these flexibility features in the production supply chain model.

2. If it is important to quickly release new versions of products and gradually improve them, the effectiveness of Agile management is determined by its ability to provide inertia and incremental development in the production supply chain model.

3. If a clear understanding of customer requirements and quick decision-making is important for the production supply chain model, then the effectiveness of Agile management is determined by transparency and the level of interaction in a customer-producer format.

4. If achieving production goals and active customer involvement in defining target priorities are crucial for the production supply chain model, then the focus on the effectiveness of Agile management is directed towards integrating customers into the final product development process.

5. If maintaining a culture of continuous improvement or optimizing specific processes is essential for the production supply chain model, then the perspective on the effectiveness of Agile management is aimed at the characteristics of their continuous improvement.

The further research perspectives involve establishing a theoretical foundation for the subsequent study of the impact of Agile management on specific performance indicators in various production supply chain models.

Література

1. Копішинська К. Використання agile-менеджменту в управлінні інноваційними процесами. Бізнес-Інфрм. 2016. Вип. 11. С. 344-349.

2. Хомич О.В., Артеменко Л.П. Стратегічне Agile-управління сучасними організаціями. Проблеми системного підходу в економіці. 2019. Вип. 6(74). С. 155-159.

3. Чайкова О.І. Застосування Agile-управління та Agile-маркетингу на підприємствах в міжнародному бізнесі. Вісник Національного технічного університету «Харківський політехнічний інститут» (економічні науки). 2018. Вип. 19. С. 84-88.

4. PricewaterhouseCoopers database (2023) PwC report “SMART management models”. URL: https://www.pwc.com/content/pwc/userReg/login.en_gx.html?redirectUrl=gG0V- 55Ilpsw21J2 UMYgbIH5ktcJLK2-lwWPau2GN84=&referrer=gG0V-

55Ilpsw21J2UMYgbIH5ktcJLK2lwWPau2GN84=&parentPagePath=/content/pwc/gx /en.

5. Christopher M. The agile supply chain: competing in volatile markets. Agile supply chain. Industrial Marketing Management. 2010. Vol. 29. No. 1. Р. 200.

6. Якубенко І. М. Agile менеджмент як ефективне управління проектами для цілеспрямованих команд. «Економіка. Менеджмент. Бізнес». 2017. Вип. No 4(22), С. 167-172.

References

1. Kopishinska, K. (2016), “The use of agile management in the management of innovation processes”, Biznes-Infrm, vol. 11, pp. 344-349.

2. Khomych, O.V. and Artemenko, L.P. (2019), “Strategic agile management of modern organizations”, Problemy systemnohopidkhodu v ekonomitsi, vol. 6(74), pp. 155-159.

3. Chaikova, O.I. (2018), “Application of Agile management and Agile marketing at enterprises in international business”, Bulletin of the National Technical University ”Kharkiv Polytechnic Institute” (economic sciences), vol. 19, pp. 84-88.

4. PricewaterhouseCoopers database (2023) PwC report “SMART management models”. Available at: https://www.pwc.com/content/pwc/userReg/login.en_gx.html?redirectUrl=gG0V- 55Ilpsw21J2 UMYgbIH5ktcJLK2-lwWPau2GN84=&referrer=gG0V-

55Ilpsw21J2UMYgbIH5ktcJLK2lwWPau2GN84=&parentPagePath=/content/pwc/gx /en.

5. Christopher, M. (2010), “The agile supply chain: competing in volatile markets. Agile supply chain”, Industrial Marketing Management, vol. 29(1), рр. 200.

6. Yakubenko, I.M. (2017), “Agile management as effective project management for purposeful teams”, «Ekonomika. Menedzhment. Biznes», vol. 4(22), pp. 167-172.

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