Drivers and sources of supply flexibility: An exploratory study
AbstractPurpose - There has been much research on manufacturing flexibility, but supply chain flexibility is still an under-investigated area. This paper focuses on supply flexibility, the aspects of flexibility related to the upstream supply chain. Our purpose is to investigate why and how firms increase supply flexibility. Methodology/Approach – An exploratory multiple case study was conducted. We analyzed seven Spanish manufacturers from different sectors (automotive, apparel, electronics and electrical equipment). Findings - The results show that there are some major reasons why firms need supply flexibility (manufacturing schedule fluctuations, JIT purchasing, manufacturing slack capacity, low level of parts commonality, demand volatility, demand seasonality and forecast accuracy), and that companies increase this type of flexibility by implementing two main strategies: “to increase suppliers’ responsiveness capability” and “flexible sourcing”. The results also suggest that the supply flexibility strategy selected depends on two factors: the supplier searching and switching costs and the type of uncertainty (mix, volume or delivery). Research limitations - This paper has some limitations common to all case studies, such as the subjectivity of the analysis, and the questionable generalizability of results (since the sample of firms is not statistically significant). Implications - Our study contributes to the existing literature by empirically investigating which are the main reasons for companies needing to increase supply flexibility, how they increase this flexibility, and suggesting some factors that could influence the selection of a particular supply flexibility strategy.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 889.
Date of creation: Sep 2005
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Web page: http://www.econ.upf.edu/
Supply flexibility; sourcing; Spain; case study;
Find related papers by JEL classification:
- M11 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Production Management
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-08 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hau L. Lee & V. Padmanabhan & Seungjin Whang, 1997. "Information Distortion in a Supply Chain: The Bullwhip Effect," Management Science, INFORMS, vol. 43(4), pages 546-558, April.
- van der Vaart, Taco & van Donk, Dirk Pieter, 2004. "Buyer focus: Evaluation of a new concept for supply chain integration," International Journal of Production Economics, Elsevier, vol. 92(1), pages 21-30, November.
- Stratton, R. & Warburton, R. D. H., 2003. "The strategic integration of agile and lean supply," International Journal of Production Economics, Elsevier, vol. 85(2), pages 183-198, August.
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