Understanding Flexibility in Supply Chains: A Conceptual Framework and Models

Rao, K S

Abstract

This paper presents the results of a conceptual study and literature review aimed at understanding flexibility in the context of supply chains. The study indicated that several types of feasible in supply chains. Identification and exploitation of flexibilities of these flexibility types is important for enhancing the competitive performance of supply chains. Practicing managers would benefit from understanding the nature of flexibility in supply chains and how it can be exploited to meet the customer requirements. Towards this, the paper proposes a conceptual framework and conceptual models that could help researchers and practitioners to understand supply chain flexibility in a more intuitive manner. The approach adopted is to systematically explore the underlying concepts of flexibility in the internal chains (manufacturing systems) and to extend them into the domain of external chains (supply chains). The proposed conceptual framework is based on resource-transformation-process-product interdependencies and, using this, various types of flexibility possible in supply chains have been identified. These flexibility types are discussed in relation to the manufacturing systems and the ideas are extended to the domain of supply chains. The paper is motivated by the view of Wadhwa and Browne (1989) where flexibility is seen as a means to provide alternative options for the flow of entities (material, resources, information etc) through various interacting processes in any system.

Keywords : flexibility, manufacturing systems, supply chains, conceptual framework

Introduction

The concept of supply chain was introduced in early 1980s and ever since it has been receiving increasing attention from both practitioners as well as researchers (Ulrika Persson, 1997). The dictionary meaning of a chain represents a series of connected things. In the case of a supply chain, the term chain is used as a metaphor to represent a series of connected business entities. This view has been widely supported in the literature. For instance, Svenssion (2002) views the supply chain as a network of organizations that are involved, through upstream and downstream linkages, in different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer. Similarly, Jan van Dorp (2002) views a supply chain as a network consisting of two or more enterprises which are each for itself and not a constituent of one or more of other enterprises, or which are separated by market forces. Nigel (1998) observes that the supply chain consists of the links between a firm and its suppliers, through to its distribution organization and on to its customers. Similar views are expressed by number of other authors. One question that follows this observation would be what is it that chains the entities in a supply chain. In our view, it is the materials, product(s)/family of products/ services, and the information that flow through these entities which chains them as a supply chain. This view is also widely supported in the literature. For instance, Milgate (2001) observes that supply chains include all activities associated to the flow and transformation of goods from the raw material through the end customer. To will (1996) and Gunasekaran et al. (2001) cite a definition of supply chain as a system whose constituent parts include material suppliers, production facilities, distribution services, and customers linked together via the feedforward flow of materials and the feedback flow of information.

Similarly, Perry and Sohal (1999) cite a definition of supply chain management as the integration of business processes from end user through original suppliers that provide products, services and information that add value for customers. Cox (1999) describes the current orthodoxy in supply chain management thinking as a way of thinking that is devoted to discovering tools and techniques that provide for increased operational effectiveness and efficiency throughout the delivery channels that must be created internally and externally to support and supply existing corporate product and service offerings to customers. Walters and Lancaster (2000) view supply chain management as the management of the interface relationships among key stakeholders and enterprise functions that occur in the maximization of value creation which is driven by customer needs satisfaction and facilitated by efficient logistics management. Lau and Lee (2000) observe that the supply chain concept is based on the formation of a value chain network consisting of individual functional entities committed to provide resources and information to achieve the objectives of efficient management of suppliers as well as the flow of parts. Chandra and Kumar (2000) define supply chain as a network (group) of entities (members) formed to solve a common logistics problem. Alshawi (2001) observes that the supply chain takes an integrated approach to logistics management. It covers the flow of goods from the suppliers through manufacturing and distribution chains to end consumer.

The above observations indicate that a supply chain is a way of looking at a group of entities from materials, services, logistics and information flow perspective. Therefore, the concept of supply chain is generic in nature and can be applied in several contexts. Two such contexts are the case of internal and external chains. When the entities of a supply chain are inside the organizational boundary, it is called an internal chain and when the entities are owned by multiple organizations, it is called an external chain. From this perspective, a manufacturing system can be viewed as a kind of internal supply chain and the commonly used word 'supply chain1 can be viewed as an external supply chain. The conceptual framework proposed in this paper is based on certain underlying commonalties between the internal and external chains. It may be noted that internal and external supply chains we are looking at are the elements at different levels of aggregation. In both chains, a set of products that flow through are the supply chain, chains these entities to form the supply chain and each of the products that flows through the supply chain is associated with a process comprising of a sequence of process steps. In some cases, it may be possible to interchange the sequence of performing these process steps without affecting the process (for example, sequencing flexibility as in the case of manufacturing systems). Each of the process steps may require one or more resources to complete the process step and in this process they consume certain time and cost and add certain value. In both the internal as well as the external chains, each of the resource may be characterized in terms of their ability to perform different process steps, also called the process capabilities. Some of the resources may have overlapped process capabilities. Under such circumstances, certain process steps can be performed using alternative resources (for example, routing flexibility as in the case of manufacturing systems). Finally, in both types of chains, the existence of flexibility (sequencing flexibility, routing flexibility) increases the control complexity and the associated information/decision flows. Thus the functioning of both types of chains and the underlying flexibility concepts remains the same. One such commonality explored in this paper is the producttransformation-process-resource interactions, as discussed in the next section. Based on this we have proposed the conceptual framework and models for understanding flexibility in supply chains.

It is interesting to note that the notion of a chain reflects two aspects: first, it comprises of a certain number of links connected to each other and second, the relationship between these links is inherently flexible, i.e. flexibility is an inherent property of a chain. Probably the chain is the best possible combination of connectivity and flexibility. This idea motivated our study on the supply chain flexibility. While the concept of flexibility is well developed in the manufacturing domain (internal chains), in the domain of supply chains (external chains), this concept needs to be enriched both at conceptual as well as operational levels. This paper is a step in the former direction as it proposes a conceptual framework and conceptual models that could help researchers and practitioners to understand supply chain flexibility in a more intuitive manner. The approach adopted is to systematically explore the underlying concepts of flexibility in the internal chains (manufacturing systems) and to extend them to the domain of external chains (supply chains). Accordingly, the paper is organized into three parts: Part-1 presents the key notions underlying the proposed conceptual framework in the form of a series of propositions; Part-2 presents multiple views of the proposed conceptual model to emphasize its generic nature and its applicability in several contexts; and part-3 presents various conceptual models to represent some possible types of flexibility in the supply chains.

Rart-1 : The Conceptual Framework and the Underlying Key Notions

As discussed above, the proposed conceptual framework of supply chain flexibility is based on the interdependencies between products, transformations, processes, and resources flowing in a supply chain. This idea is depicted in Figure-1. The key notions of the proposed framework, viz. products, transformations, processes, and resources are well known in the domain of internal chains (manufacturing systems). However, to provide greater clarity, we discuss these underlying notions in this part of the paper with the help of a series of propositions. The propositions are very generic in nature and commonly known. The objective is to discuss the key notions in a known domain (internal chains) and clarify their intended meaning in the new domain (external chains). The discussions will be leading towards identification of flexibility.

Why do Manufacturing Systems and Supply Chains Exist?

Propoation-1: Manufacturing systems and supply chains exist to meet the perceived market demand for products.

Manufacturing systems and supply chains are a set of interdependent entities that exist to meet the perceived market demand for products. Boubekri (2001) observes that supply chain management involves operations that deal with how the customer orders are processed through the system and ultimately filled. The purpose of a manufacturing system is to manufacture products in the required quantity and quality at a minimum cost. The purpose of a supply chains is to ensure that these products are distributed in time and space so that the right products are available at the right place, at the right time and at the lowest possible cost. Thus, the realization of products and their distribution to meet the market demands is the main purpose of manufacturing systems and supply chains. Then the next question would be to examine how products are realized.

How are Products Realized?

Preposition-2: Products are realized from materials through a series of transformations in their states, brought about by performing certain processes on them, with the help of certain resources, and in this process, certain time, cost and effort are consumed.

This is the core idea depicted in the conceptual framework shown in Figure-1. In the context of this framework, the key notions of product, transformation, process, and resource may be interpreted as follows.

What is a Product?

Lemma 2.1: A product is anything that can be sold to a market and that might satisfy a want or need. It is a bundle of physical, service, and symbolic attributes designed to enhance buyers' want satisfaction.

Lemma-2.2: Products include goods (the tangible components of a product) and services (the intangible components of a product). all the real life products can be placed on a goods-services continuum, as shown in Figure-2.

In this paper, we are mainly concerned with the tangible components of a product, i.e. goods flowing through the supply chain. The next important notion is the transformation.

What is a Transformation?

Lemma 2.3: A transformation is something that happens to the product when it undergoes a process.

The idea of transformation refers to something that happens to a product, as it passes through a manufacturing system or a supply chain. In the case of manufacturing systems, transformations involve changing the form and dimensions of the materials as they pass through various manufacturing processes. In the case of a supply chain, some examples of transformations may include: (a) after a conventional manufacturing process a raw material gets transformed into a semi-finished or a finished product, (b) after assembly, two or more products join to form one or more new products, (c) after disassembly, one product may get separated into two or more products, (d) after packaging, a product may get transformed into a form that is more suitable for distribution, (e) after storage, there will be a change in the temporal position (the product moves in time) of the product, (f) after transportation, there will be change in the spatial position (the product moves in space) of the product, (g) after aggregation, the product will move from a smaller lot to a bigger lot, (h) after disaggregating, the product will move from a bigger lot to a smaller lot.

Lemma 2.4 : Transformation of materials into products require a set of partially ordered transformations

Transformation of materials into products requires a set of partially ordered transformations to be carried out on the materials. This set of transformations is something that guides the development of process plans or process maps discussed subsequently. The size of the transformation set may vary, depending upon the kind of process and transformation. For instance, in the case of operations such as punching, stamping etc., the transformation set may include only one transformation. On the other hand, the transformation set for a complex machined component may include several transformations. These transformations will have to be performed in a particular order or sequence, which may be interchangeable under some circumstances. This will give rise to an important type of flexibility called sequencing flexibility which is discussed below.

Lemma 2.5: Under some circumstances it is possible to alter the order/sequence in which the transformations are to be performed to transform materials into products.

The idea of an order or sequence is important to understand a type of flexibility called the sequencing flexibility in manufacturing systems. Sequencing Flexibility refers to the possibility of interchanging the order in which the required transformations are performed on a product. This sequence is generally represented through the process plan, which is an abstract form of transformation sequence in the process plane. In general, each type of product can be associated with many sequences of transformations as determined by the technological constraints in realizing the product type. However, in most of the cases, a single process plan is followed as a matter of convenience or due to an established practice. Depending upon the design of the product, it is possible to alter the sequence of transformations to be performed. This gives rise to the sequencing flexibility. The importance of the sequencing flexibility lies in the fact that this can be built into the product design, thereby avoiding much costlier option of building flexibility into the manufacturing systems.

The potential of sequencing flexibility in enhancing the manufacturing system performance has been recognized by the researchers and efforts have been made to understand the underlying mechanisms with a view to exploit this type of flexibility. For instance, Rachamadugu et al. (1990) studied the effects of sequencing flexibility on the performance of various scheduling rules in environments such as job shops and flexible manufacturing systems. They have found that relative differences in performance of various scheduling rules diminish and the relative rankings change as sequencing flexibility increases. They have noted that since sequencing flexibility is product specific, it exists in conventional manufacturing systems as well as in flexible manufacturing systems. In the past, organizational control issues and the high cost of information systems precluded the exploitation of sequencing flexibility even when it was available in the product structure. However, recent advances in information technology and the declining cost of information systems make it possible to use sequencing flexibility at the operational level. They further noted that if the benefits of sequencing flexibility in terms of reduced flow times and inventories are sufficiently great, this has implications for designing products in such a way as to maximize the potential sequencing flexibility in manufacturing the products. Rachamadugu and Schriber (1991) proposed an approach for modeling of perfect sequencing flexibility in a scheduling environment. Benjaafar and Ramakrishna (1996) introduced several representation and measurement schemes for sequencing flexibility and studied the relationship between sequencing flexibility and system performance under a variety of design assumptions and operating conditions. Wadhwa and Rao (2000) discussed about the determinants for process sequence in the context of Process Concurrency. They observed that, two processes 1A' & 1B' are carried out sequentially due to any of the following reasons: (a) done as a matter of established practice, habit or for convenience, (b) due to functional boundaries, (c) 1B1 requires certain information from 'A', (d) 1B' requires certain decision from 1A1, (e) 1B1 requires certain materials from 1A', (f) 1B1 requires certain resource(s) which are currently being used by 1A', or (g) there is a need for synchronization of certain event(s) of 'A' & 'B', which may result in certain lead-lag precedence relationships between 'A' & 'B'

In the case of a supply chains, the process sequence may be mainly as a result of information and material dependencies. The information in the form of customer orders flows upstream through the chain and materials in the form of products flows downstream through the chain. Under some circumstances, it may be possible to alter the sequence in which the information and materials flow. This will give rise to certain types of flexibility in supply chains. Whatever may be sequence, every transformation requires one or more processes to be performed. Hence, the next question to be addresses would be to understand what a process is.

What is a Process?

Lemma 2.6: A process is any operation through which a set of inputs go through one or more steps resulting in a more valuable set of outputs.

A process can be viewed as a series of interrelated operations, which add value to its inputs resulting in outputs that are more valuable. A process comprises of a set of partially ordered steps intended to achieve the desired output. These steps may be called operations. Sometimes these steps are also referred to as processes themselves, and a process is viewed as a set of partially ordered processes.

It is important to note that alternative processes can substitute processes.

Lemma 2.7: Under some circumstances a process can be substituted by an alternative process with or without some kind of penalty in terms of time, cost and effort.

This idea is important to understand certain types of flexibility. For instance, Benjaafar and Ramakrishna (1996) used this idea to describe certain types of flexibility originating from the product designs. They observed that the mechanisms that enable flexibility can be traced to specific physical and logical characteristics of a manufacturing system and suggested that flexibility in a manufacturing system can be classified as being either product related or process related. They further observed that, in general, three types of flexibility could be associated with the manufacturing of a product. The first, operation flexibility, relates to the possibility of performing an operation on more than one machine. The second, sequencing flexibility, refers to the possibility of interchanging the sequence in which required manufacturing operations are performed. The third, processing flexibility, which is determined by the possibility of producing the same manufacturing feature with alternative operations, or sequences of operations. Lemma 2.5 proposed above refers to the above-mentioned sequencing flexibility.

Whatever may be the type of process, every process requires one or more resources to perform it. Hence the next important question is to understand what a resource is.

What is a Resource?

Lemma 2.8: A resource is a means to perform a process on a product.

In the context of this paper, we propose to view a resource as a means to perform a process on a product. Each resource will have certain capabilities to perform these processes. These capabilities are sometimes referred to as process capability. The term process capability is often used in a statistical sense to represent the relationship between the allowed and actual spread of a controlled process. In the context of this paper, we use the term process capability to represent the ability of a resource to perform operations required for one or more processes. Process capability is a key idea behind resource related flexibility.

A process requires one or more resources to perform the required operations. The converse also may be true. A resource may be able to perform operations required for one or more processes. It follows from this that resources with overlapped/identical process capabilities will be able to substitute for each other.

Under some circumstances it is possible to substitute a resource with one or more alternative resources, to perform a given process.

This idea is key to understand resource related flexibility. In general, when there are two or more resources with their process capabilities overlapped, they give rise to a type of flexibility called the routing flexibility in manufacturing systems. Routing flexibility of a manufacturing system is its ability to produce a part by alternative routes through the system. In the case of supply chain an analogous situation can be found with multiple suppliers, multiple manufacturers, multiple modes of transportation, etc. This gives rise to a type of flexibility where the materials will flow through alternative channels. Several such ideas from manufacturing domain can be extended into the domain of supply chains. Some directions for this could be found in literature. For instance Milgate (2001) observed that each supplier in a supply chain is similar to a machine processing in a production system. This paper intends it is useful to extend the idea of flexibility from a manufacturing domain (internal chains) to the supply chain domain (external chains). Wadhwa and Rao (2002) have suggested this important insight along with the need to explicitly model simultaneously the chain elements of the supply chain along with those of the manufacturing system (internal chain). The proposed conceptual framework is a step in this direction.

Part-2: Multiple Views of the Conceptual Framework

The conceptual framework proposed above can be viewed from multiple perspectives to understand different aspects of the manufacturing systems and supply chains. Three important views are: the Resource the View, the Process View and the Transformation View. These three views further emphasize the applicability of the framework to a wide variety of contexts.

The Resource View

Figure-3 presents the resource view of the framework. In the resource view, any system is visualized as a set of interconnected resources through which the products flow. Typical examples of resource view are various types of manufacturing systems such as, flow shop, batch shop, job shop, and flexible manufacturing system, and the conventional supply chain also is a kind of resource view. The resource view is more useful to represent situations where same the processes are repeatedly performed by the the same resources. Hence, it is commonly used in manufacturing and supply chain environments.

The Process View

Figure-4 presents the process view of the framework. In the process view, any system is visualized as a set of interconnected processes through which the products flow. Typical examples of process view are process plan, project plan and process map. The process view is more useful in process-focused systems. For instance, in the case of project management, each project has a unique start and a unique end and all the intermediate process are mapped with the help of a project plan. The case of one-of-a-kind manufacturing is also similar with a unique process plan. Recently there has been considerable focus on process mapping and process improvement. The business process re-engineering, the continuous process improvement, are some of the initiatives in this direction. In a supply chain environment, process view is useful for the overall improvement of the supply chain efficiency and effectiveness. In the context of this paper, we have used process view to identify various flexibility types originating from the process improvement.

The Transformation View

Figure-5 presents the transformation view of the framework. In transformation view the focus will be on the state transition of the materials from one state to another as they pass through different processes at different resources. The transformation view is the most fundamental view based on which the process view is developed. In the domain of discrete part manufacturing, this is called methods engineering, where specialized manufacturing engineers study the product designs and develop a transformation view and the corresponding resource view for manufacturing of the products. Understanding the transformation view is useful in identifying the opportunities for improvement in the process.

Thus we talk about the same system with different names and notation in different views. Whatever may be the view, the underlying structure and mechanisms may remain the same. This idea motivated us to develop the proposed conceptual framework for flexibility in supply chains, as discussed below:

Rart-3: Understanding Rexibility in the Supply Chains

With the growing turbulence in the business environment and competition shifting to the supply chain level, the supply chain flexibility is emerging as one of the key competitive priorities for the future. Developing a core competence in this area is expected to have a long-term impact on the supply chain competitiveness and business performance. Realizing this fact, recently a number of authors have started discussing flexibility from a supply chain perspective. For example, Koste and Malhotra (1999), while presenting a perspective on research opportunities in manufacturing flexibility, emphasized that the presence or absence of flexibility in supply chains and its relationship with performance should be explored and the effect of supply chain integration on the development of flexibility in supply chains should be examined. They observed that, the competitive priorities of the supply chain might impact flexibility, as efficient supply chains may emphasize certain flexibility dimensions, while responsive supply chains focus on the other. An understanding of these differences, if any, would enhance the management of supply chains. Vickery et al. (1999) view supply chain flexibility to encompass those flexibilities that directly impact a firm's customers (i.e., flexibilities that add value in the customer's eyes) and are the shared responsibilities of two or more functions along the supply chain, whether internal (e.g., marketing, manufacturing) or external (e.g., suppliers, channel members) to the firm. They defined five supply chain flexibilities viz., production flexibility (customization), volume flexibility, new product introduction (launch flexibility), widespread distribution (access flexibility) and responsiveness to target markets. Adrian (2001) views supply-chain flexibility as the ability to restructure the system quickly and inexpensively. he observes that after the Sept. 11 terrorist attacks on the USA, many businesses were forced to wonder just how vulnerable their supply chains are to unforeseen disruptions. These unforeseen events can all have devastating effects on manufacturing and distribution operations and result in millions of lost dollars. he argues that the business must bulletproof their operations by building in supply-chain flexibility. Duclos et al. (2001) propose a conceptual model of supply chain flexibility and identified six components of the supply chain flexibility, viz., production flexibility, market flexibility, logistics flexibility, supply flexibility, organizational flexibility, and information systems flexibility. They observe that as the basis of competition is extending to supply chains and time becoming increasingly important, supply chain flexibility will be a critical issue for competitiveness. They argue that if manufacturing flexibility improves performance, supply chain flexibility, which would include the manufacturing flexibility of firms within the supply chain, should further improve performance when measured across the entire supply chain. Another closely related work to supply chain flexibility is in the domain of lean and agile supply chains (Naylor et al. 1999, Mason et al. 2000, Christopher and Towill 2000).

The supply chain flexibility will manifest in the nature and type of supply chains. Hence there is a close relationship between the supply chain flexibility and its typology. For instance, Belussi and Arcangeli (1998) propose a typology of networks for flexible and evolutionary firms based on two dimensions: on one axis the operational flexibility (retractility and reversibility) is measured; on the other, static and dynamic (capabilitybuilding) forms of learning are bared. Based on this, they proposed three types of networks: those where static learning occurs, those with adaptive learning, and those characterized by creative learning. They observed that these emerging new organizational forms allow for more coordination among quasi-independent actors, and, at the same time, more flexibility and autonomy in planning, production, and distribution, may represent the evolutionary genotype of a new phase of development induced by the application of new technologies. Similarly, Pfohl and Buse (2000) propose a typology of production networks. They identified four types of networks viz., strategic network, virtual enterprise, regional network and operative network. The strategic networks are guided by a large core firm, whereas the virtual enterprise is a temporary project to exploit a particular business opportunity. Regional networks are formed by small highly specialized firms situated in spatial proximity and the operative networks use pooled resources they can access quickly at a short notice. They defined inter-firm network as a complex arrangement of reciprocal, cooperative rather than competitive, relationships between legally independent but economically interdependent firms, with potential to achieve both efficiency and flexibility at the same time due to loose coupling. They observed that the supply chain concept in its traditional form does not sufficiently address all relevant aspects of the organization of logistics in production networks, and the potential for improvements which can result from (a) horizontal relationships (two suppliers cooperate in fulfilling logistics requirements e.g they bundle their delivery volume or one of the suppliers acts as logistical service provider for the other supplier) (b) lateral relationships (a supplier supplies to one customer and at the same time supplies to another supplier of that customer) (c) circular relationships (in which the customer at the same time acts as a supplier to his supplier) or (d) general reciprocal dependencies (the performance of a supplier depends directly on the activities of other suppliers: the customer might change his production plan because of delivery problems of one supplier which in turn can result in problems for other suppliers). Some of the flexibility types proposed in this paper address the above issues.

The first two parts of the paper presented the conceptual framework and the key notions of products, transformations, processes and resources. Flexibility originates from the interdependencies of these four elements. Several examples can be found from the domain of manufacturing. For example, the ability to interchange the sequence of transformations will give raise to sequencing flexibility, the ability to perform a given transformation using more than one type of process, or the ability to perform a given process type using more than one type of resource, or having multiple resources of the same type, will give raise to routing flexibility. In a similar way, the supply chain flexibility may be considered as having originated from the interdependencies among products, transformations, processes and resources. Based on this idea, we identify several possible models for supply chain flexibility as described below.

The transformations that happen to materials as they pass through a supply chain may include 'being procured as a raw material', 'being transformed into a finished product', 'being moved in space', 'being moved in time', 'being distributed to an intermediary' and 'being delivered to the end customer'. The corresponding process types are called as 'raw material supply', 'manufacturing', 'transportation', 'storage', 'distribution' and 'retailing', respectively. The resource types that perform these processes are called 'raw material suppliers', 'manufacturers', 'transporters', 'warehouses', 'distributors' and 'retailers'. In general, a given type of transformation requires a particular type of process to be performed by a particular type of resource. Having alternatives in these interdependencies will give raise to flexibility. Some such scenarios are discussed below.

case-1 Traditional Supply Chain

Figure-6 depicts the representation of a traditional supply chain using the proposed conceptual framework. It can be seen that each state transition of the material is associated with one process and one resource. In the case of manufacturing systems, this kind of a chain represents the flow shops and transfer lines. This structure also represents many of the traditional supply chains based on single products. These types of chains may have limited or no flexibility.

case-2 Supply Chain with Process Based Flexibility

Figure-7 depicts the representation of supply chain with process based flexibility using the proposed conceptual framework. It can be seen that each state transition of the material is associated with more than one process and thus with more than one resource. In the case of manufacturing systems, this kind of chain represents the flow shop with flexible operations and flexible processing as defined by Benjafaar and Ramakrishnan (1996). This structure also represents some situations of the traditional supply chains based on single products. For instance, this may represent a situation where a product is delivered to the end customer by both the retailer as well as distributor.

case-3 Supply Chain with Resource Based Flexibility

Figure-8 depicts the representation of supply chain with resource based flexibility using the above defined conceptual framework. It can be seen that each state transition of the material is associated with one process but with more than one resource. In the case of manufacturing systems, this kind of chain represents the idea of machine flexibility as defined by Browne et.al. (1984). This structure also represents some of the traditional supply chains based on single products. For instance, this may represent a situation where a manufacturer performs both manufacturing as well as distribution, or a warehousing company handles both the storage as well as transportation.

case-4 Supply Chain with Process as well as Resource Based Flexibility

Figure-9 depicts the representation of Supply Chain with both process as well as resource based flexibility, using the above defined conceptual framework. It can be seen that each state transition of the material is associated with more than one type of process as well as more than one type of resource. This kind of flexibility will be a combination of case-2 and case-3, mentioned above.

case-5 Supply Chain with Process as well as Product Based Flexibility

In the area of supply chain flexibility, one of the important concepts found to be useful is the concept of chaining. This concept is concerned with the ability of a plant to manufacture more than one product at the same time. The concept of 'chaining1 has been introduced by Jordan and Graves (1995) as an effective flexibility strategy. They define a chain as a group of products or plants which are all connected, directly or indirectly by product assignment decisions. In terms of graph theory, a chain is a connected graph. Within a chain, a path can be traced from any product or plant to any other product or plant via the product assignment links. No product in a chain is built by a plant from outside the chain; no plant in a chain builds a product outside that chain. Figure. 10 shows three different configuration for 6-product, 6-plant chain, as discussed by Tomlin (2000).

In Figure-10, the circles represent products and the squares represent plants/machines. The graph indicates the allocation of products to the plants. In the case of specialisation, each plant manufactures only one type of product and hence there is no flexibility. The condition of chaining introduces certain amount of flexibility without much investment, but still captures most of the benefits of the total flexibility. Sheikhzadeh et al. (1998) extended the idea of chaining to study the operational performance of machine sharing configurations involving flexibility and chaining. They observed that chaining captures most of the benefits of total flexibility. In our opinion, this idea can be extended to the supply chains and this will give rise to certain product-based flexibility.

Figure-11 depicts the representation of supply chain with product based flexibility at process level, using the above defined conceptual framework. It can be seen that the state transitions of two products may share common processes and thus the common resources. This kind of a supply chain represents the job shop environment in a manufacturing system where multiple products share common processes and resources. It is also common in supply chains dealing with multiple products. For instance, a wholesaler or a retailer dealing with more than one type of product will perform the same type of processes on all the product types.

case-6 Supply Chain with Product Based Flexibility at Resource Level

Figure-12 depicts the representation of supply chain with product based flexibility at resource level, using the above defined conceptual framework. It can be seen that the state transitions of two products may share common resources through respective processes. This kind of a supply chain represents the job shop environment in a manufacturing system where multiple products share common resources. It is also common in supply chains dealing with multiple products. For instance, a transporter may be dealing with several types of products and will perform the required processes on all the product types using same resources.

case-7 Supply Chain with Product Based Flexibility at Process as well as Resource Level

Fig-13 depicts the representation of supply chain with product based flexibility at both process as well as resource level, using the above defined conceptual framework. It can be seen that the state transitions of two products may share common processes as well as resources. This kind of a supply chain once again represents the job shop environment in a manufacturing system where multiple products share common resources. It is also common in supply chains dealing with multiple products. This may be considered as a combination of flexibility types mentioned at case-5 and case-6 above.

case-8 - Supply Chain with Total Flexibility

Fig-14 depicts the representation of supply chain with total flexibility at product, process as well as resource level, using the above defined conceptual framework. It can be seen that the state transitions of two products may share common processes as well as resources in several combinations. This kind of a supply chain represents the flexible manufacturing system environment where multiple products share common processes and resources. This motivated us to evolve the idea of a flexible supply chain system with similar interdependencies among products, processes and resources. This would be an extension of the concept of flexible manufacturing system into the supply chain domain as shown in Figure-15.

Based on the above discussions it may be possible to identify certain types of flexibility in supply chains, based on process and resource flexibility as shown in Figure-16.

Figure-16 shows some possible types of supply chain flexibility. It can be seen that in a traditional supply chain both the resource based flexibility as well as the process based flexibility are low. As we increase the resource based flexibility, new supply chain configurations will emerge involving multiple suppliers, multiple manufacturers and multiple supply chains. Similarly, when we increase the process based flexibility, new supply chain processes will emerge resulting in alternative information channels and alternative channels for materials flow.

The information and the materials flow through the members of the chain for the reasons of geographical locations, business conveniences, logistic reasons or as a matter of established practice. With the advent of information technology, it is possible to alter these processes towards greater flexibility. One such possibility is already operational in the form of e-commerce where the orders are directly received by different echelons of the supply chain directly using internet. Similar developments are taking place in the domain of logistics through concepts such as cross-docking. With the help of these developments it would be possible to develop alternative channels for materials flow among various echelons of the supply chain. These ideas are shown in Fig. 17.

Use of alternative resources will result in new supply chain configurations such as the 'chain of chains'. Another important concept in this direction is the possibility of cross-flow between various entities in the same echelon. In our opinion this would further enhance flexibility of the supply chain system. Fig. 18 depicts these ideas.

When both the process based as well as the resource based flexibility types are combined in a multi product environment, the flexible supply chain system will emerge. It is our research endeavor to develop an understanding of such an environment. This paper is a step in this direction.

Conclusions

This paper presented the results of a conceptual study and literature review aimed at understanding the concept of flexibility in the context of supply chains. The study indicated that several types of supply chain flexibility are feasible and identification and exploitation of these flexibility types would be useful in enhancing the competitive performance of supply chains. Keeping this in view, this paper proposes a conceptual framework for supply chains based on the interdependencies between products, transformations, processes and resources. Based on this, framework number of conceptual, models have been presented to represent the process, resource and product based flexibility in supply chains. As on all-embrcing conclusion, this paper endeavors to help practitioners to understand the concept of flexibility in the context of supply chains in a more intuitive manner. Wadhwa and Rao (2002) have proposed a flexibility maturity model, that can equally important for both the manufacturing systems and the supply chains.

Rexibility Mapping : Practitioner's Perspective

1. Which variants of flexibility do you envision in a practical situation of a Rexible Supply Chain on the following planes :

* Rexibility in terms of "options?'

* Rexibility in terms of "change mechanisms"

* Rexibility in terms of "freedom of choice" to participating actors.

2. Identify and delineate the types of flexibility to facilitate enhanced flexibility in supply chains relevant to your organization. On which planes, the flexibility needs to be enhanced ?

3. Attempt the flexibility in supply chains in your organization on the following continua. (Please tick mark in the appropriate box(es)).

4. Develop a SAP-LAP (Stuation Actor Process-Learn ing Action Performance) model of "Rexibility in Supply Chains" appropriate to your organization competitiveness.

Reflecting Applicability in Real Life

1. Implement the methodology of understanding and developing models for enhancing the flexibility in supply chains in your organization.

2. Out of the seven cases of flexibility in supply chains discussed in this paper, select one which is the most beneficial to your organization.

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K. S. Rao

Research Scholar

Indian Institute of Technology Delhi

Hauz Khas, New Delhi, India

S. Wadhwa

Professor

Indian Institute of Technology Delhi

Hauz Khas, New Delhi, India

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