Tag Archives: supply chain flexibility

The flexibility of the logistics provider

Revised on: 2015-09-12

Supply chain flexibility is a decisive factor in avoiding supply chain disruptions. One major contributor to supply chain flexibility is the flexibility of the logistics provider, and Mohamed Naim, Gilbert Aryee and Andrew Potter have just published a paper about this. In Determining a logistics provider’s flexibility capability they aims to develop the construct of transport flexibility within the context of supply chain strategy. We assess the role of flexibility in satisfying competitive opportunities while accommodating supply chain uncertainties. In this way, we may then determine the role of different transport flexibility types in delivering strategic outcomes.

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The supply chain of the future

Revised on: 2015-09-12

Many global supply chains are not equipped to cope with the world we are entering. Most were engineered, some brilliantly, to manage stable, high-volume production in China and other low-cost countries. But in a future when the relative attractiveness of manufacturing locations changes quickly—along with the ability to produce large volumes economically— such standard approaches can leave companies dangerously exposed. So say Yogesh Malik, Alex Niemeyer, and Brian Ruwadi in the McKinsey Quarterly of January 2011. Essentially, in the future, economies of scale need to be replaced by economies of flexibility in order to cope with the risks of turbulent and shifting sourcing and manufacturing opportunities, wherever they occur…and disappear again.

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Supply Chain Turbulence

Revised on: 2015-09-12

We are living in turbulent times. So are our supply chains. Nonetheless, the standard tenets of supply chain management prescribe that supply chains are most efficient when fully controlled from end to end, without any volatility or uncertainty. The basic idea is that variability is detrimental to performance as it causes cost in the form of stock-outs, poor capacity utilisation, and costly buffers. Really? Martin Christopher and Matthias Holweg disagree, and that is why they wrote “Supply Chain 2.0”: managing supply chains in the era of turbulence. This paper questions the established approach and argues that in the light of increasing turbulence a different approach to supply chain management is needed. What is needed is an approach that builds structural flexibility into the supply chain decision making. Only thus can we create the level of adaptability that is needed to remain competitive in the face of turbulence.

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Book Review: Operations Rules

Revised on: 2011-07-14

Operations Rules by David Simchi-Levi comes with an ambiguous title. You can read this two ways: 1) Operations Management (over)rules Supply Chain Management or 2) The Rules of (Business) Operations Management. Either way, this is an excellent book with a broad scope. Most importantly perhaps, it contains an extensive chapter on managing supply chain risk, something that is very rare in the average book on supply chain management. That should not come as a surprise, however, because this is not an average book. It is one of the most applicable and practically oriented books on supply chain operations that has come across my desk in recent times.
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Can your business take a blow?

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Revised on: 2015-10-06

Are you prepared for whatever mishaps your business throws at you? If you’re not, you better start learning Dutch and you will be able to find out how you can better your resilience. Why? Because today’s post is based on a Dutch book I found the other day. Published in 2009, and written by Bart Lammers, Walther Ploos van Amstel and Pascal Eijkelenbergh, Risicomanagement en Logistiek translates as “Risk Management and Logistics” and is a short and succinct handbook that I wish will be translated into English soon. Why? Because this book contains an excellent new framework for logistics resilience and how to achieve it. I’ve done my best in translating the essential parts, but I could still use some help from my Dutch readers.

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Flexing your SCM muscles

Revised on: 2015-09-12

A supply chain is never stronger than its weakest link, and that (having a weak link) is perhaps the greatest supply chain risk. Rigid supply chains are particularly weak, unlike flexible supply chains that can bend and adapt to new situations. Flexible supply chains can indeed “flex” their supply chain management muscles (pun intended) and show the strength that lies in them. With transportation being a key ingredient in any supply chain, much of this strength comes from flexibility in transportation, that is flexibility in node, in link and in time, as Mohamed M. Naim, Andrew T. Potter, Robert J. Mason and Nicola Bateman write in their 2006 article on the role of transport flexibility in logistics provision. Adding flexibility reduces supply chain uncertainty and takes away many supply chain risks.

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Contingent flexibility

Revised on: 2015-09-10

Can contingency planning increase flexibility and minimize risk exposure to supply chain disruptions? Obviously yes, but what is it about the contingency planning process that relates to flexibility? That question is asked by Joseph B Skipper and Joe B Hanna in Minimizing supply chain disruption risk through enhanced flexibility. Surprisingly, this article suggests that only very few variables of contingency planning are positively related to flexibility…puzzling, isn’t it?

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Emergency Logistics

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Revised on: 2015-09-11

Can commercial logistics’ ideas and solutions work in humanitarian supply chains? No. Why? Well, perhaps they could work, but in most cases they won’t, simply because there is a profound lack of technical logistics knowledge in many aid agencies and even more so, very few experienced logisticians working in the Humanitarian Aid community. That’s what Anthony Beresford and Stephen Pettit say in their 2009 article Emergency logistics and risk mitigation in Thailand following the Asian tsunami. This scarcity of qualified logistics know-how impacts directly on the functioning of the relief effort. So they say…

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Supply Chain Flexibility in Strategic Networks

Revised on: 2015-09-03

A supply chain as a virtual enterprise network. That is the underlying reasoning in the 2009 paper How to improve supply chain flexibility using strategic supply chain networks by Herwig Winkler. Virtual Enterprise Networks do not play a major role in this paper, but what fascinates me are (1) the parameters defining supply chain flexibility: Transparency, Simplicity, Responsiveness/Agility and Security/Reliability, and (2) flexibility potentials: Structural, Technological and Human flexibility potentials.

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A conceptual model of Supply Chain Flexibility

Revised on: 2015-09-11

What do you do when you find two research papers by the same three authors, published the same year, in two different journals, with almost the same title? A conceptual model of supply chain flexibility and Supply Chain Flexibility: Building a New Model by Rhonda R Lummus, Leslie K Duclos and Robert J Vokurka were both published in 2003, the latter actually citing the first, but are they in fact the same papers?

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Humanitarian and military supply chains side-by side

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Revised on: 2015-09-11

The recent earthquakes in Samoa in the Pacific and in Padang in Indonesia are a poignant reminder for three chapters in my most recent book review, Dynamic Supply Chain Alignment by John Gattorna. In this book, the three chapters by Kim Winter and Michael Whiting and Kate Hughes point at why both military and humanitarian supply chains are needed for the overall best effective rescue effort. Only by combining the two, the strengths of both types of logistics can be exploited, where the extreme agility of rescue organizations can be matched with the extreme efficiency of the military.

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Supply chain agility – Risk mitigation and response

Revised on: 2015-09-03

How does company culture shape a firm’s risk mitigation and response, and thus, how does company culture shape a firm’s supply chain agility? That is the research question asked by Michael J Braunscheidel and Nallan C Suresh in their 2009 article The organizational antecedents of a firm’s supply chain agility for risk mitigation and response. The article was suggested to me by one of my readers as his ‘favorite’, and after reading it I do understand why, because it links up with and extends many previous works on supply chain flexibility and supply chain agility.

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Sheffi’s Resilient Enterprise and supply chain risk

Revised on: 2015-09-09

It is unfortunate that many companies still leave risk management and business continuity to security professionals, business continuity planners or insurance professionals. So say Yossi Sheffi and James B Rice in their 2005 article A Supply Chain View of the Resilient Enterprise. It is unfortunate that it is this way, because building a resilient enterprise is an enterprise-wide undertaking that is about so much more than simply preparing a company for disruptions.

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Is Dynamic Supply Chain Alignment the way of the future?

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Revised on: 2015-09-11

Dynamic Supply Chain Alignment. That is the magic formula that runs like a red thread through John Gattorna‘s latest book, where he demonstrates how there are four types of supply chains, based on four types of customer behavior. This is a well-written and excellently illustrated book, which I will take a closer look at, chapter by chapter, in order to answer the question: Is Dynamic Supply Chain Alignment the ultimate formula for streamlining your supply chain for the utmost performance?

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Supply chain flexibility – a complete literature review?

Revised on: 2015-09-11

Someone had to come up with this, it was just a matter of time, and it is no suprise that this article comes from India, one of the major providers of global outsourcing for many industries. In an article reviewing some 100 references, Babu & More (2008) Perspectives, practices and future of supply chain flexibility, the focus is on anything supply chain flexibility, really anything that relates to supply chain flexibility. And honestly, I must say, they don’t leave much ground uncovered.

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Robustness, resilience, flexibility and agility

Revised on: 2015-10-04

Several “buzzwords” have been linked to supply chain risk management (SCRM) in various ways: robustness, flexibility, agility and resilience. These concepts are often confused, and thus, warrant further explanation. They are distinctively different, and which strategy that works best would depend not only on the supply chain in question as a whole, but also which part of the supply chain that may be vulnerable. That is why it is useful to look at what sets one apart from the other.

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Ericsson versus Nokia – the now classic case of supply chain disruption

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Revised on: 2015-11-20

When faced with a supply chain disruption, proactive and reactive supply chain risk management can in fact make or break a company’s existence. One of the most famous (or rather infamous) cases is the fire at the Philips microchip plant in Albuquerque, New Mexico, in 2000, which simultaneously affected both Nokia and Ericsson. However, both companies took a very different approach toward the incident, and in hindsight, clearly displayed how to and how not to handle supply chain disruptions.

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A new supply chain perspective: The supply chain life cycle

Revised on: 2015-09-09

It is not often that I come across papers with a holistic view of the supply chain as a living and dynamic system. However, the introductory chapters of Architecture for supply chain analysis and methodology for quantitative measurement of supply chain flexibility, a 2001 PhD thesis by Wei Deng Solvang, explore the topic of supply chains having a typical 5-phase life cycle. I find that highly interesting. Not only is a supply chain a network of interlinked actors, but the links (or relations, if you so wish) are constantly changing, with new ones appearing and old ones dissipating.

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Building a secure and resilient supply chain

Revised on: 2015-09-09

Are you gambling with your supply network? You should be aware that the supply network is inherently vulnerable to disruption and the failure of any one element in it could cause the whole network to fail. Current trends call for a supply network design that is both secure and resilient; that means a supply network that has advanced security processes and procedures in place, while at the same time being resilient enough to respond to unexpected disruptions and restore normal supply network operations.

In their article, “Building a secure and resilient supply chain“, James B. Rice and Federico Caniato point at a number of actions and responses to achieve supply chain resilience.

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Robustness, flexibility and resilience

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Revised on: 2015-12-02

In a previous paper, back in 2004, I discussed the issue of Flexibility and robustness as options to reduce risk and uncertainty. Since then a new term has emerged: resilience, and today I would like to compare these three terms. Robustness is the ability to accommodate any uncertain future events or unexpected developments such that the initially desired future state can still be reached. Flexibility is the ability to defer, abandon, expand, or contract any investment towards the desired goal. Resilience is the ability of a system to return to its original state or move to a new desirable state after being disturbed.

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