Fostering Proactiveness in Data-Driven Matrix Organizations : A Study of Alfa Laval's Distribution Center in Tumba

Abstract: Globalization has increased the complexity of the business world, as it adds new dimensions to companies’ operations, such as global suppliers and customers, and competition from global actors. To handle the complexity, companies are pressured to become more data-driven to be able to measure and align their operations, and create possibilities for efficiency and competitiveness [Skjott-Larsen etal., 2007; Long, 2018]. In order to enable the change towards becoming more data-driven, companies need to rethink the structure of their organization. Matrix structures have gained popularity, since it allows companies to focus on more than one dimension by creating functional teams focused on specific tasks [Sy et al., 2005]. However, it is not uncommon that the functional groups becomes functional silos, with an inward focus on the own groups’ performance, leading to decreased understanding of other groups and poor communication between groups. A lack of understanding of other groups can lead to a reactive, rather than proactive, way of handling problems [Motiwalla and Pearson, 2009]. The purpose of this project is to create a process that can be used to facilitate proactive work in adata-driven matrix organization struggling with a reactive way of handling problems. The process can be used as a way to decide between possible solutions in decision-making processes, while making sure that any affected department is involved at an early stage in the decision-making process. At Alfa Laval’s distribution center (DC) in Tumba, they are facing the challenges of functional silos and reactive work. The organization is data-driven, why a lot of decisions are based on data. However, the best decision according to the data is not always feasible, which has lead to decisions being made that affects other departments negatively. Based on data from and observations made at the DC, a processwas created. The process was iterated and improved through application to real-life problems and point of improvements identified at DC Tumba. While it is based on the operations at Alfa Laval, it canbe applied to any organization facing similar challenges. The final version of the process proved to deliver good solutions to problems by involving stakeholders early on in the process, making it possible for them to influence how the solutions should be adjusted in order to avoid the changes affecting their daily work negatively. The most important conclusion is that important stakeholder departments should be involved earlyin decision-making processes. That way, their valuable competence and knowledge can be utilized when identifying possible solution, and any negative effects of a solution on another departments can be discovered before implementation. In addition, by taking the time to thoroughly analyze the root cause and effects to a problem, the understanding of the chain can increase.