The issues of SC risk compel consideration of the correspondent notions of SC resilience and vulnerability (hereafter SCRES and SCV respectively). The study of SCRES and SCV is a developing territory within the topography of logistics and SC research. A report commissioned by the Department of Trade and Industry in 2001 (Cranfield University School of Management) could now be regarded as the seed of a steadily broadening vine. The report (p. 2) defines SCV as “exposure to serious disturbances, arising from risks within the supply chain as well as risks external to the supply chain.” This definition indicates that its authors, like Mason-Jones and Towill (1999), split risk into two categories: internal and external. “Internal” concerns factors under direct management control (e.g. quality standards); “external” concerns events and conditions over which management has no control (e.g. natural disasters and sociopolitical events)....continue reading
To Jüttner and Maklan (2011), SCV is the managerial counterpart of SCRM. Similarly, to Blos et al (2009) and Christopher and Peck (2004), SCV is the susceptibility of the SC to the possibility and ramifications of disruption. Since anything at risk is vulnerable, SCRM declares the SC vulnerable. For this reason, SCV is commonly conceptualised as complementary to SCRM (Wagner and Bode, 2006).
Christopher and Peck (2004) maintain that resilience in the SC demands flexibility and agility. SCRES is contingent on efficient transportation and communication systems – rudimentary variables commonly overlooked by SC theorists.
SCRES addresses the post-disruption recoverability of the SC (Christopher and Peck, 2004; Peck, 2005). Ponomarov and Holcomb, (2009, p.131) provide a precise definition of SCRES: “the adaptive capability of the supply chain to prepare for unexpected events, respond to disruptions, and recover from them and maintain continuity of operations at the desired level of connectedness and control over structure and function.”...continue reading
The literature of SCRM is coherent in its promulgation of SCM-compliant solutions to risk. Circularity colours the reasoning of SCRM: the issues of integration are resolvable by integration; risk is the product of uncertainty; SC solutions resolve SC problems. The question of SCRM’s applicability to non-SC systems is unaddressed, as too is the possibility that non-integrated systems might retain risk-related advantages over integrated systems. The prospect that risk might be addressed by unorthodox or retrograde methods awaits presentation.
"Lean" or “leanness” is one of a quintet of paradigms that dominate modern organisational management (Naim et al, 2004), the others being Time-Based Competition (Stalk, 1988), Mass Customisation (Pine, 1993), SCM (Oliver and Webber, 1982; Houlihan, 1987), and agility (Kidd, 1994).
Lean evolved from the Toyota Production System (TPS) developed during the 1970s by Ohno and Toyoda and publicised in the Anglophone world by Shingo (1981), Schonberger (1982) and Ohno (1988). According to Holweg (2007) “lean” was coined by Krafcik (1988) who introduced the “tools” of waste reduction, which also provide the auxiliary but significant benefits of improved quality and reduced cost and lead times....continue reading
“Agile” in manufacturing describes plant responsiveness to market requirements, the ability to produce novel or established goods quickly and flexibly (Slack et al, 2004). Katayama and Bennett (2006, p. 93) define agile manufacturing as “the idea of frequently changing products and making investment in equipment to facilitate the production system’s agility”.
"Agile" in Supply Chains
“Agility is the ability of an organisation to respond rapidly to changes in demand, in terms of both volume and variety” (Christopher, 2003, p. 285).
Agile, although frequently regarded as an element of lean, is better described as its complement. Whereas lean offers tools for streamlining throughput and reducing inventory, agile suggests no specific methods for systemic improvement. Agile is more philosophy than toolkit, although to van Hoek (1998), agile is a composite concept of strategic postponement (discussed later) and variable capacity.
Quick Response (hereafter "QR") can be traced to Blackburn (1991) and embodies the flexibility principles contained in agile. Fernie (1994) and Hines (2001) claim QR was coined in 1985 by Kurt Salmon Associates who identified deficiencies in the SCs of US fashion makers. Fisher and Raman (1996) define QR as lead time reduction through improved IT, automation, manufacturing, and use of airfreight. Lummus and Vokurka (1999) claim SCM derives from QR and ECR (Efficient Customer Response – the grocery trade equivalent of QR). As with agile, QR’s objectives are lead time compression and delivery of variety through buyer-supplier partnerships. Parallels with lean, agile, and SCM concepts are apparent. For example: echoing the observations of Hancock and Zaycko (1998) on lean, Lowson (2002) showed that performance degradation is likely if implementation of QR does not occur inside a framework of integration.
This is a lean/agile hybrid concept proffered by Naylor et al (1999), Towill and Christopher (2002), and Mason-Jones et al (2000). Variation in customer demand is made serviceable by adoption of agile practices that involve postponement of final changes. For leagility to be achievable, systems must be lean, capacity adjustable, and demand estimable and communicable (van Hoek, 1998). Agile processes begin at the point of customisation/configuration. The later this point, the more the advantages of lean and volume can be leveraged against cost.
Postponement predates the SC and SCM paradigm by several decades. The earliest mention appears to be Alderson (1950), followed by Bucklin (1965). Alderson argues that differentiation of goods directly affects cost and risk. Waste is reduced by delaying accretion of inventory until, ideally, the stage preceding customer contact. Upstream, generic goods, unimpeded by complication incurred by change to form, continue to flow. At the customization point, inventory consists of modifiable goods whose demand is known. In this light, postponement resembles the zero waste principle of lean thinking.
According to Bowersox et al (1999), postponement is rarely practiced due to inadequate information sharing. This supports the SCM maxim that utilisation of tools such as leanness, agility, postponement, and QR yield maximal cost benefits only when operated within an ecology of mutuality.
Another flexibility tool, Mass customization (hereafter "MC"), introduced by Davis (1989), is the opposite of Fordian production principles. MC is achieved through agility and incorporates postponement, flexibility, and integration (Pine, 1993; Hart, 1995; Eastwood, 1996). MC shares many of the features of SCM. Like postponement, MC has become a tool of SCRM. MC reduces demand-side risk by mobilizing the SC to configure standard components according to near-as-known demand.