Driving supply chain flexibility in an uncertain and volatile world

This is an excerpt of the original article. It was written for the March-April 2024 edition of Supply Chain Management Review. The full article is available to current subscribers.

March-April 2024

Part of any supply chain manager’s job is risk mitigation. Thanks to COVID-19 and the ensuing, and constant, disruptions that have followed, more companies are now focused on reducing their exposure to supply chain chaos. We’ve heard a lot about diversification in recent years—having multiple suppliers in multiple locations. But risk mitigation goes far beyond diversification, and the recent case of Boeing should serve as a cautionary tale not to avoid those other risks.

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In a world where managers must develop capabilities that enable the management of supply chains under increasing uncertainty, flexibility is more important than ever before. In our research, we have identified nine fundamental drivers of supply chain flexibility. In this paper, we present these drivers as part of a new model, the SC-Flexibility Drivers Matrix, designed to help supply chain managers develop flexibility in their supply chains.

The relevance of supply chain flexibility in today’s world

The post-pandemic world can be described as a VUCA world—as it is volatile, uncertain, complex, and ambiguous. Although the COVID-19 pandemic turned out to be the start, there are plenty of other recent events, such as the ongoing Russia-Ukraine war, the U.S.-Taiwan-China conflict, the Suez Canal blockage, and the recent Israel-Hamas war in Gaza, that have resulted in major global supply chain disruptions.

In today’s global and interconnected supply chains, one important observation is that these natural and political disruptions spread extremely fast. This challenges supply chain managers and requires them to implement flexibility in their supply chains.

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