Briefly describe the three primary risk mitigation strategies based on the idea of flexibility that supply chain managers can use

Question

What will be an ideal response?

Answer 1

Answer: Flexibility plays an important role in mitigating different risks and uncertainties faced by a global supply chain. Flexibility can be divided into three broad categories–new product flexibility, mix flexibility, and volume flexibility.
New product flexibility refers to a firm's ability to introduce new products into the market at a rapid rate. New product flexibility is critical in a competitive environment wherein technology is evolving and customer demand is fickle. New product flexibility may result from the use of common architectures and product platforms with the goal of providing a large number of distinct models using as few unique platforms as possible. Only once the product takes off is it moved to a dedicated capacity with lower variable costs.
Mix flexibility refers to the ability to produce a variety of products within a short period of time. Mix flexibility is critical in an environment in which demand for individual products is small or highly unpredictable, supply of raw materials is uncertain, and technology is evolving rapidly.
Volume flexibility refers to a firm's ability to operate profitably at different levels of output. Volume flexibility is critical in cyclical industries.