Evaluating flexibility on order quantity and delivery lead time for a supply chain system

Most of the previous literature on production flexibility is centred on the flexibility of manufacturing systems. However, the manufacturing system is just one of several key components of a supply chain. A supply chain is a network involving all of the activities within individual organisations that link material suppliers, manufacturing factories, distributors, warehouses, retailers and customers. Research into the flexibility of a supply chain therefore extends from the intra-organisational flexibilities to the inter-organisational flexibilities. This article provides a study of examining two aspects of supply chain flexibility: order quantity flexibility and lead time flexibility, which have been clarified as the two most common changes which occur in supply chains. Order quantity flexibility refers to the ability to provide proper order quantity for customer needs. Lead time flexibility allows customers to set the order due date depending on their needs. A simulation model is built to evaluate the performance on different flexibility levels of a supply chain. The experimental results provide interesting insights and can be applied in selecting suppliers with order quantity flexibility and delivery lead time flexibility.