The Supply Chain Risk Assessment Tool

Subject: Management
Pages: 2
Words: 634
Reading time:
3 min
Study level: College

Supply chain flexibility has become progressively crucial since it allows businesses to better oversee their funds and resources while still meeting customer demand. Flexibility refers to a supply chain’s ability to recognize and adapt to any short-term problem. Changes in the business environment are causing the market to become more unpredictable. Flexibility in the supply chain has now become increasingly necessary to deal with it directly. Supply chain resilience refers to the ability to manage and respond to the unexpected throughout the whole risk spectrum, from day-to-day logistical hazards to devastating supply chain interruption. Organizations may find various definitions of flexibility in supply chain management in the literature (Pellegrino et al., 2020). This paper investigates the concept of “supply chain flexibility” to better comprehend the phenomena and discusses adaptability, alignment, agility and diversification of suppliers.

Agility refers to a supply chain’s ability to react quickly to significant changes in market conditions. The usage of buffers can help attain agility where excess capacity, inventories, and information systems all serve as buffers in a value-for-money supply chain. Supply chains have been able to minimize inventory as a buffer in recent years due to rapid advancements and lower costs in implementing information technology. In many people’s minds, inventory reduction is a goal in and of itself. According to a retired Apple global supply chain executive, Foxconn could employ 3,000 people in a matter of hours if needed (Singh et al., 2020). As a result of its flexible Asian manufacturing, which could swiftly scale up and down as required, Apple could redesign the iPhone at the last minute with astonishing agility.

When it comes to supply networks, adaptability refers to the desire and ability to alter them as needed. Creating a single supply chain for a client is desirable in general since it reduces expenses. On the other hand, adaptable businesses recognize that this is not always the most excellent value option. For example, a client may demand the repair of one sort of goods in less than eight hours, but another product can be fixed and returned in one month. The firm must develop flexible supply networks to efficiently and successfully service these shifting requirements. Tesla acknowledged the automobile industry’s complicated supply chain and used vertical integration to transform the sector (Liu et al., 2019). Tesla has incorporated several production stages, including battery manufacturing, electric motor manufacturing, self-driving algorithms, and a solid central monitoring system.

Alignment refers to achieving uniformity in the interests of all supply chain players. In many cases, carefully designed incentives into contracts may accomplish this. Collaboration with suppliers and customers on forecasts can also aid in alignment. Businesses have become reliant on the reduced expenses of doing business in places like China and India. As a result, they are susceptible to disruptions in the case of any problems in those nations. With complex political settings, pandemics, and trade disputes between the United States and many other countries, maintaining a diverse supply chain is more vital than ever (Ivanov et al., 2018). Tesla’s diversification extends beyond new goods and services; it is the outcome of a vertically integrated organization and line of products that enable fast changes in product distribution.

Flexible enterprises, in the end, can defend themselves whereas experts have lauded Honda’s exceptional supply chain flexibility, claiming that this flexibility allowed the firm to survive the 2008 crisis and spike in petrol prices relatively unchanged. Inventory and the expenses associated with it rise as the number of sites in a supply chain grows. Companies strive to minimize the number of facilities and combine them to limit them and manage their extra expenses to reduce inventory costs. The current worldwide pandemic problem has highlighted the importance of firms focusing on flexible supply chain solutions to adapt to current interruptions and plan for future challenges.


Ivanov, D., Das, A., & Choi, T. M. (2018). New flexibility drivers for manufacturing, supply chain and service operations. Web.

Liu, Y., Zhang, Y., Batista, L., & Rong, K. (2019). Green operations: What’s the role of supply chain flexibility?. International Journal of Production Economics, 214, 30-43. Web.

Pellegrino, R., Costantino, N., & Tauro, D. (2020). The value of flexibility in mitigating supply chain transportation risks. International Journal of Production Research, 1-18. Web.

Singh, R. K., Modgil, S., & Acharya, P. (2019). Identification and causal assessment of supply chain flexibility. Benchmarking: An International Journal. Web.