Assessing the effectiveness of supply flexibility sources: an empirical research

Abstract

This paper focuses on supply flexibility, i.e., the ability of the purchasing function to respond in a timely and cost effective manner to changing requirements of purchased components, in terms of volume, mix and delivery date. It is argued that managerial actions may have different effects on different dimensions of supply flexibility. More specifically, we aim to answer the following research questions: what is the effectiveness of the different supply flexibility sources? Are there any variables that could moderate the relationship between supply flexibility sources and supply flexibility? We perform a regression analysis of the effectiveness of the different supply flexibility sources. In particular, we conduct a stepwise regression, setting the supply flexibility sources as independent variables, and the three dimensions of supply flexibility (identified in the factor analysis) as dependent variables. In order to refine the models and increase the generalisability of the study, some control variables (i.e., firm revenue and flexibility focus) are also included in the regression analysis. Results suggest that each dimension of supply flexibility is associated with a particular group of sources, i.e., the sources used to increase a certain dimension of supply flexibility (e.g., supplier responsiveness) may be ineffective for another dimension (e.g., adaptability).

Keywords:

• sourcing
• purchasing
• Spain
• empirical
• survey

Acknowledgements

The authors gratefully acknowledge the significant contribution of the reviewers. The authors also thank AERCE for facilitating access to its members. Cristina Giménez acknowledges financial support from research grant BEC2006-12291.