Drivers and Sources of Supply Flexibility: An Exploratory Study

27 Pages Posted: 19 Jul 2007

See all articles by Elcio Mendonça Tachizawa

Elcio Mendonça Tachizawa

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Cristina Giménez Thomsen

ESADE University Faculties - Department of Operations and Innovation Management

Date Written: September 2005

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.

Keywords: Supply flexibility, sourcing, Spain, case study

JEL Classification: M11, L60, L24

Suggested Citation

Mendonça Tachizawa, Elcio and Giménez Thomsen, Cristina, Drivers and Sources of Supply Flexibility: An Exploratory Study (September 2005). Available at SSRN: https://ssrn.com/abstract=1001405 or http://dx.doi.org/10.2139/ssrn.1001405

Elcio Mendonça Tachizawa (Contact Author)

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

Cristina Giménez Thomsen

ESADE University Faculties - Department of Operations and Innovation Management ( email )

Avda. de Pedralbes 60-62
Barcelona, 08034
Spain

HOME PAGE: http://www.esade.edu/profesorado/cristina.gimenez

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