Abstract for: Measuring Manufacturer Responsiveness & Supplier’s Order Variability due to Flexibility in a Two-Echelon Supply Chain

Maintaining a flexible supply chain is a strategic capability in which many industries have shown interest nowadays, as it allows the chain to adapt to market needs. Nevertheless, adding flexibility could contribute to unwanted variabilities and increase costs. Therefore, to determine the viability of a flexibilization process, it is necessary to know and quantify its effects on the supply chain. The proposed model aims to answer this question by determining how flexibility impacts responsiveness and variability in a two-echelon supply chain. This research presents two main contributions as a result of applying System Dynamics methodology: i) The combination of flexibility, lot size, variability, responsiveness, and their relationships in a holistic view; and ii) The managerial insights resulting from the interaction of these variables.