Flexibility global supply chain

When capacity is chosen in a global supply chain, it may be necessary to anticipate possible opportunities that may arise as countries change their trade agreements, for example. Having locations that can make use of the operational flexibility can have benefits. But all this means paying a price in terms of current performance in order to position the supply chain to have a higher level of average performance. To illustrate such issues, we provide a numerical example. 

What do all these alternative capacity configurations surest All along, if we carry excess capacity, we can avail of these opportunities as they arise. The extra capacity does not have to remain idle it needs to remain flexible so that it can be used when conditions are right. This example shows how excess capacity in a global supply chain provides a real option that can be exercised as business conditions unfold. Eliminating excess capacity will reduce the options available to operate a global supply chain. 

Smith, Rob, Global Supply Chain Performance and Risk Optimization The Value of Real Options Flexibility Demonstrated in the Global Automotive Industry, Weisbaden Deutscher Universitats-Verlag GmbH, 2002. 

Simparel—offers the quickest, most flexible, and affordable global supply chain management solution available today. 

Appropriate flexibility is an effective approach for a global supply chain to deal with a variety of risks and uncertainties. Whereas some flexibility is valuable, too much flexibihty may not be worth the cost. Strategies such as chaining and containment should be used to maximize the benefit from flexibility while keeping costs low. 

Define uncertainties that are particularly relevant when designing global supply chains. The performance of a global supply chain is affected by uncertainty in a number of input factors such as demand, price, exchange rates, and other economic factors. These uncertainties and any flexibility in the supply chain network must be taken into account when evaluating alternative designs of a supply chain. 

Stewart (1997), states that managing supply-chain operations is critical to any company s ability to compete effectively, and that success for many companies now depends on their ability to balance a stream of product and process changes with meeting customer demands for delivery and flexibility. Optimally managing supply-chain operations, has therefore, become critical to companies ability to compete effectively in the global marketplace. 

Table 3.1 presents a working definition of each driver. Figure 3.1 models the connections among them. Innovation, in Figure 3.1, pushes the whole process forward, so we place it first in our sequence. Innovation is external to the supply chain system. It pushes supply chain participants to continuously improve their chains. The three drivers — Extended Product Design, Globalization, and Flexibility Imperative — shape the direction, scope, and form of products and services and the supply chains needed to deliver them. 

With regard to globalization, the latter company, the one with functional products, might pursue globalization to expand its supplier base to achieve cost reductions. The innovative product manufacturer might use out-of-country suppliers to get the best technology, improve supply chain flexibility, and reach distant markets. 

GowH.R., OliverL.D., GowN.G., 2002, Co-operating to Compete in High Velocity Global Markets The Strategic Role of Flexible Supply Chain Architectures, Journal on Chain and Network Science, 2(1), pp. 19-32. 

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MACtac is a leading global supplier of pressure-sensitive adhesives. Founded on personal service, technical support, quality assurance, custom capabilities and supply chain efficiency, MACtac is dedicated to providing superior quality to its customers. Headquartered in Stow, Ohio, MACtac is a subsidiary of the Bemis Co. Inc., the largest flexible packaging supplier in North America. For more information, visit www.MACtac.com. 

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