Abstract

Agility — namely, the ability of a supply chain to rapidly respond to changes in market and customer demands — is regarded as the bearer of competitive advantage in today’s business world. The need for agility has traditionally been associated with supply chains in high technology industry products. However, traditional industries also face similar challenges in terms of speed, flexibility, increased product diversity and customization. This study contributes to the discussion on agility in supply chain management (SCM) and provides a novel focus on the development of an agile supply chain in a traditional industry.

The object of this study is the development of an agile supply chain in a steel product network in the Raahe area in Northern Finland. The case network is undergoing a shift towards project-oriented business, where quick responses are the priority and agility is recognised as the facilitating factor. Using a constructive approach, an agile supply chain for a steel product network, SteelNet system, is developed. SteelNet system functions through the Internet and agent software technology. In identifying the new challenges raised by advanced information and communication technologies (ICT) in the development of an agile supply chain, the study presents some valuable ICT options for SCM. Following a review of the current understanding of agility in SCM literature, the study identifies the key elements of agile supply chains and proposes a four-dimensional agile supply chain framework by which to assess levels of agility. Using the framework, the study describes how the key elements appear in the case network. The study assesses the change process, and the necessary improvement steps, towards agility.

It is concluded that agile supply chains have a major role also in traditional industry, and comprehensive implementation of ICT throughout the chain is of utmost importance in the development of an agile supply chain. Further insights to the discussion on agility are provided, and these and the conclusions extend a drawbridge to other companies and business networks in traditional industry to consider the clear advantages to developing their own agile supply chains.