Supply chain flexibility

Second, company can avoid uncertainty by cutting lead times and increasing the supply chains flexibility so that it can product to order or at least manufacture the product at a time closer to when demand materializes and can be accurately forecast. 

The last driver arising from innovations is what we call the supply chain flexibility imperative. Absence of flexibility infers a static supply chain that is unable to flex as environmental changes require. This is based on the assumption that few organizations do not face environmental change of some sort. Lack of flexibility also characterizes supply chains that serve different customers who have different needs with a one-size-fits-all approach. They fail to take into account the needs of different customer segments. 

Flexibility is a term with different meanings to different people. The importance of flexibility raises the need to define what flexible is actually and what is needed in the way of supply chain flexibility. It is vital to SCM because needed flexibility should be a design criterion for the supply chain itself and its operational capabilities. For this to happen, management must be prepared to respond in three ways ... 

Management mindset must be willing to recognize the need for defining flexibility and have an ability to define what kind of supply chain flexibility is needed for the business. 

Figure 3.3 illustrates a supply chain flexibility specification. The example that follows for a sandwich shop defines supply chain flexibility requirements for product mix, volume, and customer response time. 

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. 

Chiang, W.K. and G.E. Monahan, The Impact Of The Web-Based Direct Channel On Supply Chain Flexibility In A Two-Echelon Inventory System, Working Paper, University of Maryland, Baltimore County, 2002. 

To increase supply chain flexibility The agility of a supply chain in responding to marketplace changes to gain or maintain competitive advantage... 

KW. (2011). Winning in two worlds Supply chain flexibility. Knowledge Wharton, http // knowledge. wharton.uperm.edu/article.cfm articleid=2683... 

SCOR Level 7 Supply chain Flexibility and Cost Assets... 

A summary (Table 8.9) comparing the two network designs shows that the redesign should be undertaken. There is a cost savings, NPV is positive, IRR clears the 10% hurdle rate, and utilization while at 76% allows for growth and supply chain flexibility. 

Vickery, S., Calantone, R., Droge, C. (1999). Supply chain flexibility An empirical study. The Journal of Supply Chain Management, 55(3), 16—24. 

The third chapter (Chap. 10) in this section, authored by Professors Christopher Tang and Brian Tomlin, examines the contention that strategies designed to enhance supply chain flexibility will mitigate supply chain risks. The authors provide a comprehensive analysis of different categories of risk and the impact that flexibility might have on these in terms of likelihood and consequences. 

Key Performance Indicators (KPIs) in supply chain balanced scorecards and performance management are one example for analysis methods. Beamon (1998) and Chan (2003) distinguish qualitative performance measures such as customer satisfaction, on-time delivery, fill rate or flexibility as well as quantitative measures based on costs in distribution, manufacturing and inventory or warehousing. 

Aprile D, Garavelli AC, Giannoccaro I (2005) Operations planning and flexibility in a supply chain. Production Planning Control 16 (1) 21-31... 

Bok, J.K., Grossmann, I.E., and Park, S. (2000) Supply chain optimization in continuous flexible processes. Industrial S. Engineering Chemistry Research, 39, 1279. 

Bertrand JWM (2003) Supply Chain Design Flexibility Considerations. In de Kok AG, Graves SC (eds) Supply Chain Management Design, Coordination and Operation. Elsevier, Amsterdam et al., pp 133-198... 

In the short term, more advanced companies meet the overall supply chain demand while simultaneously minimizing the overall costs of inventory, production, and missed sales opportunities. Further, with frozen production periods they avoid unnecessary changeovers, smoothen the whole production, purchasing, and maintenance process, and achieve superior adherence-to-plan and productivity performance. Nevertheless, if required, they can react promptly to unforeseen changes thanks to reduced changeover times, flexible suppliers, and powerful IT tools that adjust the plans quickly. 

---