Creating the responsive supply chain

Agility has many dimensions and the concept applies as much to networks as it does to individual companies. Indeed a key to agile response is the presence of 

Agility, as we have said, is not synonymous with leanness but it can build upon it. Leanness in a sense is about doing more with less. It owes its origins to the Toyota Production System (TPS) and its pre-occupation with the reduction or elimination of waste (muda).2 Lean manufacturing is characterised by level schedules , i.e. a forward plan to ensure that the use of resources is optimised. 

The backdrop against which lean thinking originated was the Japanese automobile industry of the 1970s. This was an industrial context typified by the volume manufacture of relatively standard products (i.e. low levels of variety) and a focus on achieving efficiencies in the use of resources and in maximising economies of scale. In this type of situation, i.e. standard products and relatively predictable demand, experience has shown that lean practices work well. 

By supply characteristic is meant the lead time of replenishment. This could be replenishment of fhe producf ifself if if is boughf in (e.g. a refailer) or of components in the case of a manufacfurer. Clearly, if replenishmenf lead fimes are short then a different supply chain strategy can be employed than when lead times are long. 

Demand conditions may be characterised by the predictability of demand. One measure of demand predicfabilify is fhe variabilify of demand by definition demand that does not vary much from one period fo anofher is easier fo predicf. 

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The state provides to industry a harmonised framework for determining, evaluating and communicating risks in the European market (REACH). This also includes a form of standardisation for procedures, responsibilities and time frames in the chain, and options for state sanctions. This increases the market potential and innovation incentives for demonstrably application-safe chemical products. At the same time the basis is created for efficiency gains by employing universal IT solutions in the European market. However, the required framework also means that implementation is left to the industry and the market in many areas in order to leave enough scope for diversified solutions that are specific to the different supply chains. Simply the announcement of the REACH system has improved vertical communication in the supply chains and supported the consolidation of substance and application knowledge. 

Reichhart, A., Holweg, M., 2007. Creating the customer-responsive supply chain a reconciliation of concepts. Int. J. Opr. Prof. Mangmt. 27 (11), 1144—1172. 

The political requirement within Europe, that the industry should be responsible for the assessment of the 30,000 substances currently on the market and their applications is in line with the voluntary commitment of responsible care by the chemicals industry. Implementation of this -commitment has so far failed because many users of chemical products have not complied with it. The REACH system proposed by the EU Commission would create a regulative framework for structuring responsibility and information flow along the supply chain, in a binding marmer for the first time. The commercial institutions should respond to this state initiative. 

Many of the contracts were moved to different suppliers so there was a lot of shifting of business in the supply chain. This shifting created negative responses in many organizations in the supply chain. 

This increase reflects the exponential growth in orders in response to lack of information in a fragmented supply chain. As mentioned in Chapter 1, this is called the bullwhip effect. Thus, even in a serial supply chain, lack of transparency can create undesirable volatility even when each entity behaves optimally, thus generating the bullwhip effect. The consequences of such volatility are increased capacity, inventory, delivery lead time, and costs. 

Responses Customer responses form the central theme of the supply chain strategy. The market value of the supply chain can be dramatically enhanced by jointly creating profitable revenue growth through integrated inter-enterprise solutions and responses. 

Salzmann et al. (2006, p. 15) have identified a broad range of possible stakeholder impacts, e.g. (1) impacts resulting in the innovation of processes, products and supply chains and (2) impacts on brand value and reputation and customer loyalty. Similarly, it has been claimed that shareholder value will be best realized if companies include environmental and social responsibility objectives in their value creating statements, processes and products (Dobers and Wolff 2000). Stakeholders of all types are interested in associating with organizations with whom they can identify, and with whom they perceive a match in values (Pirson and Malhotra 2008, p. 17). 

Rice J.B., 2003, Corporate Response to Terrorism Creating Resilient and Secure Supply Chains, Global and Homeland Security Science, Technology and the Role of the University MIT, Cambridge, MA Massachusetts Institute of Technology. 

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