Defining Supply Chain Flexibility: The Search Continues

As we begin to close the books on 2010, one major topic of discussion that will likely follow us into 2011 (and beyond) is supply chain flexibility. Volatile market conditions have made historical forecasting more difficult and less accurate, especially in consumer-driven retail environments. Our more complex, global supply chain configurations often compound the situation and make flexibility seem ever more elusive.

So what is a flexible supply chain? Is it simply the ability to adjust supply to demand in the shortest amount of time for the lowest cost? Although each of us undoubtedly has his/her own definition of flexibility, I believe some of the best supply chains share a few common characteristics:

1. Direction – Know what you want from your supply chain and have someone (or a team) who can communicate it to all of your partners and monitor progress. When circumstances change—and they always do—you’ll be better positioned to implement a new plan.
2. Common Goals – If your supply chain partners don’t know your success priorities or KPIs (lower transportation costs, leaner inventories, customer satisfaction), you may never realize them.
3. Collaboration – The supply chain that works together is rewarded together! Sharing information, ideas and innovation among strategic partners makes it easier to cost-effectively respond to market changes and proactively determine new strategies.
4. Technology – When used correctly, this powerful tool has helped supply chains circle the globe in record time with laser-like accuracy. Investing in technology (and updating/maintaining it) is vital to the speed and precision of your supply chain.

What’s your definition of supply chain flexibility? What  would you add to my list of flexible supply chain characteristics?