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Drivers and sources of supply flexibility: An exploratory study

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  • Elcio Mendonça Tachizawa
  • Cristina Giménez
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    Abstract

    Purpose - 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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    File URL: http://www.econ.upf.edu/docs/papers/downloads/889.pdf
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    Bibliographic Info

    Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 889.

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    Date of creation: Sep 2005
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    Handle: RePEc:upf:upfgen:889

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    Web page: http://www.econ.upf.edu/

    Related research

    Keywords: Supply flexibility; sourcing; Spain; case study;

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    1. 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.
    2. 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.
    3. 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.
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