Supply Chain Relationships Among Strategy, Flexibility And Performance: A Theoretical Framework

Abstract In today’s global business environment, concepts are moving towards inter-national contrary to yester years. This has made companies to explore the new ways to leverage their supply chain and to develop a strategic approach. A strategic approach with flexibility is helpful to increase the overall performance of the organization and to respond customer requirements. Consequently, in order to maintain cut-throat competition in the market and to be able to satisfy end customers, supply chain strategy (SCS) must be aligned with the supply chain flexibility (SCF). With a large number of SCS dimensions and SCF dimensions, it is not feasible to practice each dimensions. The study aims to classify them in a suitable manner, which is helpful to the organizations to select a correct mix of SCS and SCF dimensions to increase supply chain performance (SCP). The purpose of this study is to identify all the dimensions of SCS and SCF. In addition, this study also aims to identify SCP dimensions. Later on, the relationships among SCS, SCF and SCP are identified through a theoretical model. The findings from various literatures are compared and analyzed. Thus guidelines are developed.

Introduction: In today’s highly competitive business environment, organizations are concerned about minting profits (long term and short term) by searching and applying new ways to cut the cost. Supply Chain Management (SCM) plays a vital role to do so. SCM is the streamlining of supply chain activities, providing linkages between internal and external partners (Lummus et al., 1999). According to Harland (1996) “SCM is the management of the network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers.” Lembert (2008) defined SCM as “the integration of key business processes across the supply chain for the purpose of creating value for customers and stakeholders.”
In early 1990s, SCM started earning interest of organizations due to three basic reasons. Firstly, companies have been moving from vertical integration to horizontal integration. Thus they have been more concern about outsourcing some or all the activities carried out for production. Secondly, globalization increased competition nationally and internationally both. This leaves a scope for customer to have more choices. Finally, organizations realized that the management of supply chain as a whole can increased the performance. Integration of all the nodes in supply chain requires better coordination among their activities. This enforces organizations to focus on intra-organizational supply chain activities and to practice improved and stronger supply chain strategy with flexibility to enhance supply chain performance.

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