The role of intermediation in enhancing the flexibility of supply systems

Purpose - The purpose of this paper is to critique and extend an existing risk/customer sensitivity model by assessing the role of mix and volume flexibility in increasing a supply system’s risk alleviation capabilities and by considering the role of intermediaries in global supply networks. The paper introduces first a framework for supply systems flexibility and then a taxonomy that distinguishes between different supply sourcing strategies based on their flexibility requirements. Ultimately, the paper provides empirical evidence to highlight the fact that even though the existing supply chain management literature views intermediation as a barrier to supply chain transparency, intermediaries can have a beneficial effect in enhancing the flexibility of global supply systems and increasing their risk alleviation capabilities and customer sensitivity. Design/Methodology - Using Purvis et al. (2008)’s supply network taxonomy, this present paper revisits the framework developed by Faisal et. al. (2006), which proposed that suitable supply chain strategies can be selected based on their customer sensitivity and risk alleviation competency. Empirical research was further undertaken in order to validate the framework and investigate the concept of supply chain intermediation as a risk alleviation mechanism in an international context. A case study research approach was chosen as the main research strategy. The supply chain of focus is a UK fashion retail chain. Findings - Two key antecedents of supply chain flexibility are utilized: vendor flexibility and sourcing flexibility. The paper identifies the key role of intermediaries in increasing the risk alleviation capabilities along the vendor and sourcing flexibility capabilities of lean, agile and leagile global supply systems. Research Limitations - A great variety of flexibility enablers need to be considered in order to provide a balanced view of risk alleviation capabilities, hence the case analysis remains at a necessarily high level. At the same time, while the present cases were chosen to be representative, they may not necessarily reflect the experiences of all the different actors in the sector under study. As such, further research will be needed to generalise and enhance our findings. Practical Implications - The model we developed may act as a route map by which supply chain strategists may develop a flexibility strategy. The paper emphasises the need for a dynamic perspective on different types and degrees of flexibility, based on the supply system’s risk alleviation needs. It also highlights the role of intermediation as a means of leveraging ownership and control of supply system resources in order to increase the level of flexibility they can provide. Originality/Value of paper – Even though there has been a large amount of research on the topic of flexibility, the majority of it has been centred on manufacturing flexibility. What recent research has been done on supply chain flexibility has very much taken a static strategic perspective and ignored the implications that global sourcing can have on the management of these networks. Our paper extends the existing knowledge of supply chain flexibility by looking at the total supply network. Furthermore, the existing supply chain management literature views intermediation as a barrier to supply chain transparency, adding cost but no value. The paper will provide empirical evidence to highlight the role of intermediaries in enhancing the flexibility of global supply chains, depending on whether they are lean, agile or leagile