Drivers and sources of supply flexibility: an exploratory study

Purpose – Many researchers have studied manufacturing flexibility, but supply chain flexibility is still an under‐investigated area. This paper aims to focus on supply flexibility, the aspects of flexibility related to the upstream supply chain. Its purpose is to investigate why and how firms increase supply flexibility. Design/methodology/approach – An exploratory multiple case study was conducted. Seven Spanish manufacturers from various sectors (automotive, apparel, electronics and electrical equipment) were analysed. Findings – The results show that firms need supply flexibility for a number of important reasons (manufacturing schedule fluctuations, JIT purchasing, manufacturer 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: “improved supplier responsiveness” and “flexible sourcing”. The results also suggest that the supply flexibility strategy selected depends on the type of uncertainty (mix, volume or delivery). Research limitations/implications – This paper has the limitations common to all case studies, such as the subjectivity of the analysis, and the questionable generality of the results. Moreover, there may be some sort of country bias because only Spanish firms have been analysed. Originality/value – The study contributes to the existing literature by empirically investigating the main reasons for companies needing to increase supply flexibility and how they increase this flexibility, and suggesting some factors that could influence the selection of a particular supply flexibility strategy.