Reconfiguration framework of a supply network based on flexibility strategies

Abstract

Because the supply network of an enterprise should be flexible enough to capture and overcome market dynamics, one of the major concerns of global enterprises is to make their supply network reconfigurable. Although many strategies for flexible management of a supply network have been proposed, especially for mitigating supply network risks, it still remains unclear how to apply the strategies to a supply network and how to reconfigure the supply network. This paper examines the influence of flexibility strategies in a dynamic global market environment on the structure of supply network, and proposes a method of reconfiguring the supply network of an enterprise to cope with its flexibility strategies. A reconfigurable supply network model is proposed, and flexibility strategies are classified, and critical indices of strategies are defined. In the proposed model, each business actor is defined as a network node and each node has its own goal. A node optimizes its goal to reduce and overcome the risk of market environments. The result of optimization indicates that the supply network structure is reconfigured dynamically.