From the course: Implementing Supply Chain Management
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Invest in flexibility
From the course: Implementing Supply Chain Management
Invest in flexibility
- If we knew exactly what would happen in the future then supply chain management would be a lot easier but the world is in a constant state of change so our supply chains need to be flexible. Let's look at what supply chain flexibility really means and how you can build flexibility into your supply chain. MIT Professor David Simchi-Levi describes supply chain flexibility as "the ability to respond to change without increasing operational and supply chain costs and with little or no delay in response time." In other words, flexibility has to do with both time and money. It's how easy it is for your supply chain to scale up or to scale down to respond to changes both in upstream supply and in downstream demand. Upside flexibility is important for taking advantage of sales opportunities. Let's say a customer wants to place a big order. Upside flexibility could come from having extra capacity and inventory on hand and it…
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