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Supply chain
Identification and causal flexibility
assessment of supply
chain flexibility
Rohit Kr Singh 517
Department of Operations Management,
Received 4 January 2019
International Management Institute Kolkata, Kolkata, India Revised 24 May 2019
Sachin Modgil 9 July 2019
Accepted 26 July 2019
International Management Institute Kolkata, Kolkata, India, and
Padmanav Acharya
National Institute of Industrial Engineering, Mumbai, India

Abstract
Purpose – The purpose of this paper is to map the causal relations among various supply chain flexibility
(SCF) dimensions having significant impact on the Indian personal hygiene industry.
Design/methodology/approach – The author(s) have gone through extensive literature review and
extracted 22 SCF dimensions. After conducting field visits and expert interaction in the firm related to case
industry, 11 major SCF dimensions that seem to have a significant amount of influence on supply chain
performance of the firms were retained for further consideration. The author(s) have used decision making
trial and evaluation laboratory (DEMATEL) to establish initial causality and structural equation model
(SEM) to investigate the contribution of different flexibility dimensions on overall SCF.
Findings – After DEMATEL analysis, three major SCF dimensions were considered for SEM modeling. The
result shows that product flexibility and physical distribution flexibility have favorable influence on the SCF,
while the demand management flexibility adversely impacts overall SCF.
Practical implications – The approach adopted in the study can help firms to determine and exercise the
flexibility dimensions of a particular supply chain. The DEMATEL and SEM offer a facilitation to explain the
causal relationship between the different dimensions to take long-term decisions and address the uncertainty
in the demand and supply side.
Originality/value – This paper has made an attempt to evaluate the supply chain flexibilities, prioritize
them and evaluate the relationship amongst these flexibilities and the degree to which they affect or are
affected by one another in the Indian personal hygiene industry.
Keywords Supply chain flexibility, Decision making trial and evaluation laboratory (DEMATEL),
Structural equation model (SEM), Causality, Indian personal hygiene industry
Paper type Research paper

1. Introduction
Indian personal hygiene industry includes personal care product manufacturers and raw
material suppliers, distributors, retailers and customers (Wang and Uslay, 2018). This
industry is one of the leading contributors in GDP of a nation. The fast moving consumer
goods (FMCG) industry helps in the development of favorable economic conditions not only
through generating export revenues, but also by developing high prospects for employment
opportunities (Indian Brand Equity Foundation, 2009). Personal hygiene is important as it
has been identified as a positive contributor to mental health among persons experiencing
homelessness. Limited access to sanitation may also exacerbate chronic diseases, such as
HIV or diabetes, by posing barriers to treatment adherence (Leibler et al., 2017; Skiest et al.,
2007). The adequate supply chain of the said industry can contribute to maintain a decent
Benchmarking: An International
status in the hygiene of society. Journal
Today’s supply chain decision makers/executives recognize that their part is becoming Vol. 27 No. 2, 2020
pp. 517-549
much more complex. This complexity is due to the prompt changes and ambiguous © Emerald Publishing Limited
1463-5771
business scenario (Um, 2017; Obayiet al., 2017; Luo and Yu, 2016). In this uncertainty, it is DOI 10.1108/BIJ-01-2019-0003
BIJ necessary for the firms to be flexible across the supply chain. Supply chain flexibility (SCF)
27,2 includes all the nodes of chain. It includes product-based strategies, process-based strategies
and structure-based strategies (Patel and Jayaram, 2013; Jacobs et al., 2011; Scavarda et al.,
2010; Nair, 2005; Qiang et al., 2001). Many firms invest on their flexibility capabilities. The
investment in flexibility incurs cost as well risks (He et al., 2012; Fantazy et al., 2009). The
factors like supplier partnerships, variety management and close customer relationships
518 have an impact on the SCF (Um, 2017; Patel and Jayaram, 2013; Scavarda et al., 2010).
Flexibility initially concentrated on capability of a firm and, slowly, it reached to SCF (Rojo
et al., 2016; Tipu and Fantazy, 2014). Flexibility and strategy are considered as major factors
to affect the supply chain performance (Tipu and Fantazy, 2014; Christopher and Ryals,
1999; Jenkins and Wright, 1998) of a firm. Flexibility influences the supply chain
performance. The supply chain performance can enhance the effectiveness of entire chain
activities (Fantazy et al., 2009). SCF of a firm relates to its aptitude to adjust to the varying
production levels and firm’s talent to handle unusual orders (Nagarajan et al., 2013; Vickery
et al., 1999). SCF will address the issues such as sudden variation in customer requirements,
manufacturing of a range products with different varieties and features, adjustment with
customer demand to provide the products consistently along with customer handling
(Narasimhan and Das, 2000; Vokurka and O’Leary-Kelly, 2000). The SCF can differ from one
manufacturing environment to other (Uluskan and Godfrey, 2018; Bilek, 2010).
SCF encircles its scope from downstream to upstream of the chain. This has ultimate effect
on the end consumer (Tipu and Fantazy, 2014; Vickery et al., 1999). In consumer–supplier
relationships, the variety (range) and delivery (response) are the areas of concern from a
flexibility view (Sokri, 2014; Das and Abdel-Malek, 2003; Slack, 1991). Flexibility has many
dimensions right from supplier(s) delivery to the outbound logistics and manufacturing
operations (Salvador et al., 2007; Oke, 2005; Duclos et al., 2003). The operational part of
flexibility includes process, variety, volume, level of involvement of worker and materials
(Wan et al., 2012; Yang and Burns, 2003; Faber et al., 2002; D’Souza and Williams, 2000).
Process capability relates to the type of products can be manufactured. Logistics flexibility
(downstream) relates to the distribution side, whereas an upstream flexibility is about the
sourcing of material from supplier(s) (Sánchez and Pérez, 2005; Garavelli, 2003; Duclos et al.,
2003). Volume flexibility relates to a firm’s capability to adjust their manufacturing operations
in response to customer demand (Um, 2017; Salvador et al., 2002). Further, launch flexibility
relates the firm’s talent to improvise existing products or develop and launch new products
(Tipu and Fantazy, 2014; Sánchez and Pérez, 2005). In comparison, volume flexibility helps to
manage market uncertainty, whereas launch flexibility overcome product uncertainty
(Sánchez and Pérez, 2005). There are other types of flexibility reported in literature which
includes delivery flexibility, information systems’ flexibility with varying needs of customers
(Benaben and Vernadat, 2017; Ramraj, 2010). The SCF scope differs from firm to firm and
industry to industry. To attain the flexibility in the supply chain, it is mandatory fort every
supply chain partner to contribute by being flexible.
For having an efficient supply chain, companies need to focus on multiple dimensions of
a supply chain (Aitken et al., 2016; Melnyk et al., 2014). Due to intense competition, the
companies needs to have a flexible supply chain system, which adjusts the activities of the
supply chain and other linked activities (Merschmann and Thonemann, 2011; Sánchez and
Pérez, 2005). Firms with flexibility in their supply chain can offer new products quickly
along with short time for delivery and right volume to the market (Swafford et al., 2006;
Pagell and Krause, 2004). The firm with flexible supply chains can achieve competitive
advantage over others (Phillips and Wright, 2009; Avittathur and Swamidass, 2007; Selldin
and Olhager, 2007; Ho et al., 2005; Sánchez and Pérez, 2005). SCF dimensions may not be
equally important for the industry (Stevenson and Spring, 2007; Sánchez and Pérez, 2005).
Therefore, it is always desirable to understand the degree of relationship between the
flexibility dimensions of a supply chain (Pujawan, 2004). The increased or decreased Supply chain
flexibility does not give great economic benefits to the firm (Angkiriwang et al., 2014; flexibility
Gong, 2008). Therefore, it is necessary to address the following research questions:
RQ1. What are the major dimensions of flexibility contributes in achieving SCF in Indian
personal hygiene industry?
RQ2. Which flexibilities have the highest degree of effect and relationship in
supply chain?
519
RQ3. How do the different dimensions impact the SCF?
The remainder of the paper is organized as follows: Section 2 presents the literature review
and Section 3 highlights the rationale and research framework. Section 4 displays the
research design and methodology adopted in the study. Section 5 presents findings of the
study and followed by discussion in Section 6. Section 7 presents the limitations and scope
for future research.

2. Literature review
Flexibility is the ability of an operating system to adjust in reaction to uncertainties and
simultaneous alterations in the linked supply chain activities (Fayezi et al., 2014; Wallace
and Choi, 2011; Husdal, 2010). SCF has many dimensions right from inbound logistics to
ensuring the delivery at customer end (Sánchez and Pérez, 2005; Duclos et al., 2003;
Garavelli, 2003). SCF requirements differ from firm to firm and also it is event dependent
(Tipu and Fantazy, 2014). SCF includes the operational systems involvement, logistics
practices, structure of the firm, supply network and information systems flexibility (Kumar
et al., 2006; Lummus et al., 2003; Duclos et al., 2003). Flexibility in the supply chain design
plays an important role in the firm’s business (Bianchini et al., 2019; Stevenson and Spring,
2009; Aprile et al., 2005; Bertrand, 2003; Graves and Tomlin, 2003; Garavelli, 2003). In the
buyer–supplier relationship, the flexibility helps to offer stability for the supplier and helps
the focal firm to respond to demand variations (Milner and Kouvelis, 2005; Sethi et al., 2004).
Information systems helps to improve the payment cycles, transparency, avoid over-
production and decrease the inventories (Gosain et al., 2005; Fredericks, 2005; White et al.,
2005; Fredriksson and Gadde, 2005).
In the present time, supply chain managers recognize that their roles are becoming more
complex, mainly as a result of rapid changes, globalization and especially uncertain
business environments (Um, 2017; Singh and Acharya, 2013). It is very essential for
managers to read the nature of business complexity and make changes in the system to
sustain (Famiyeh et al., 2018; Saleh and Watson, 2017; Wan Ahmad et al., 2016). The
complexity of business increases more when customers have a variety of choices available
in the market (Pearson and Sutherland, 2017). The customer demands are highly volatile in
nature and can be catered with a flexible supply chain system (Ivanov et al., 2018; Polater
and Demirdogen, 2018; Ye and Lau, 2018). Um (2017) made an attempt to analyze how
variety management activities and supplier partnerships affect SC flexibility at different
levels of customization. He suggested that internal variety management strategy and
external SC integration have a positive influence on SC flexibility. Fredriksson and
Wänström (2014) investigated how manufacturing and SCF impacts the ability to transfer
production between the units (Fantazy and Salem, 2016). They found that manufacturing
flexibility has a high impact on the physical and knowledge transfer (Blome et al., 2014). The
new product development dimension also has a major impact on the administrative transfer
in combination with the SCF dimension. Yi et al. (2011) made an attempt to examine the
different flexibility strategies adopted by supply chain participants as a result of different
environmental uncertainties. After examination, he suggested that better supply chain
BIJ responsiveness can be achieved in two ways: by reducing uncertainties and improving SCF
27,2 (Sánchez and Pérez, 2005). Chan et al. (2009) made an attempt to understand issues
surrounding flexibility and adaptability in supply chain management from an industrial
practitioner. He came out with a conclusion that flexibility and adaptability are useful in
practical supply chain applications (Feizabadi et al., 2019). Several authors also suggested
that inventory replenishment in terms of delivery due date and quantity could be a
520 useful way in reducing the impacts of uncertainties (Kampen et al., 2010; Chan et al., 2009;
Sánchez and Pérez, 2005).
Firm-specific events, from time to time, may require a high level of flexibility to mitigate
the risk and achieving business goals. This often requires the partners of the focal firm to
adopt flexibility in their operations and can share cost-benefit trade-offs (Simchi-Levi, 2011).
The first step toward flexibility is to enhance the scope at the focal firm level on the shop
floor (Tipu and Fantazy, 2014; Sánchez and Pérez, 2005). SCF has a positive impact on firm
performance (Dhiaf et al., 2012; Liao et al., 2010). SCF has a direct impact on order-fulfillment
lead-time, warranty costs, per unit delivery cost and customer return rate (Vickery et al.,
2003; Harrison and New, 2002). Researchers in the past suggested that firms should have
flexible business systems to overcome uncertainties (Eisenhardt et al., 2010). Hence, in this
study authors have identified all possible dimensions of SCF. After understanding the
business context of the personal hygiene industry, only 11 flexibility dimensions were
retained for further study. decision making trial and evaluation laboratory (DEMATEL)
was used to analyze the degree of relationship of dimensions with each other and structural
equation model (SEM) was used for causal modeling.
The previous studies have not discussed about the relationship among product, demand
and physical distribution type of flexibility. The studies are very limited to understand the
degree to which three types of flexibilities are affected by another particularly in the Indian
personal hygiene industry. There is a research gap to understand that how product, demand
and physical distribution flexibility contribute toward overall SCF. After the identification of
the research gap, it is necessary to view why the personal hygiene industry is chosen for study.

2.1 Indian personal hygiene industry: an overview

FMCG segments can be classified as personal care, household care, branded and packaged
food and tobacco. The FMCG sector is the fourth largest in India (Equitymaster, 2018). The
FMCG industry has continued to deliver superior performance over other industries (BCG,
2015). For marketing, FMCG spends at large amount of Rs14,600 crore in 2016, whereas other
industries spent less. Retail, durable and fashion have spent altogether Rs5,600 crore. On the
other hand, the automobile industry planned to spend Rs49,000 crore. The FMCG industry
spent 74 percent in TV ads along with 19 percent in print and 1 percent in radio. On the other
hand, automobile spent 51 percent of the ad budget in print and 34 percent in TV and 3 percent
in radio (Zee Business, 2017). This clearly indicates the competition in the FMCG industry.
Indian personal care industry is the second largest within the FMCG segment with a
market share of 20 percent followed by tobacco (15 percent) and household care (12 percent)
(Patil, 2016).The Indian personal hygiene sector is dominated by multinational companies
which have been operating in the country for a number of years. The personal hygiene market
consists of toiletries, bath soaps, deodorant and shower products. Personal hygiene products,
such as soaps, shampoos, conditioners, etc., are daily use products for everyone. Soap is the
largest segment of the personal hygiene market in India, accounting for 80.9 percent of the
market’s total value. The Indian personal hygiene market generated total revenues of $2,749
in 2016, representing a compound annual growth rate (CAGR) of 6.5 percent between 2012 and
2016.Market consumption volume increased with a CAGR of 3.8 percent between 2012 and
2016, to reach a total of 4,387.3m units in 2016. In 2021, the Indian personal hygiene market
is forecast to have a volume of 5,123.2m units (MarketLine Industry Profile, 2017).
Customers nowadays are more aware, and they have many options to switch over to other Supply chain
brands. This means there is demand uncertainty in most of the products. This leads to the flexibility
need to have flexibility in the supply chain to compete in the marketplace.

2.2 Identification and description of SCFs

Dimensions of flexibility are extracted from existing literature (Table I) for developing a flexible
supply chain paradigm in firms that belong to the Indian personal hygiene industry. Some of the 521
dimensions here seem to be overlapped or have similar meaning. However, a clear distinction
among various flexibility dimensions has been proposed by various researchers in earlier
studies in the context of SCF. Table II explains the SCF dimensions extracted from literature.
The firms bring the flexibility in their supply chain to cope with the quickly changing
environment and uncertainty (Saleh et al., 2009; Chandra and Grabis, 2009; Skintzi, 2007;
Stevenson and Spring, 2007; Grewal and Tansuhaj, 2001). Firms need to foresee flexibility
beyond manufacturing activities, which will help to add value to customers (Schmenner and
Tatikonda, 2005; Krajewski et al., 2005; Slack, 2005). Processes and logistics are important
areas in any manufacturing firm. Process flexibility and logistics flexibility have a positive
impact on overall supply chain performance of an organization (Garavelli, 2003; Zhang et al.,
2002). Coordination among the suppliers/vendors as well as customers can be enhanced
through enhancing information technology capabilities (Singh et al., 2019; Singh and Acharya,
2014). All the processes of a supply chain together create a supply chain network. Lummus
et al. (2003) found that supply network flexibility, information system flexibility, logistics
process flexibility and operations systems flexibility have a positive impact on overall firm
supply chain performance. It is also important to have organizational flexibility, information
systems flexibility along with market flexibility to achieve desirable performance in a
dynamic environment (Duclos et al., 2003). SCF can also be classified with internal and
external flexibility (Chang et al., 2003, 2005; D’Souza and Williams, 2000). External flexibility is
about the market, needs of the customer and is known as inter-firm level flexibility (Stevenson
and Spring, 2007; Chang et al., 2006). On the other hand, internal flexibility is about the intra-
firm level (Stevenson and Spring, 2007). To cover both external and internal flexibility, the
author(s) have identified all possible dimensions of SCF in the literature.
From Table III, it is concluded that authors selected 68 articles from various prestigious
journals – only those articles which inform about model development for SCF and causality
analysis – which were selected for further review. A similar methodology was used by
Narayanamurthy and Gurumurthy (2016) for selection of articles to carry out literature review
in leanness assessment. The initial search for this review yielded many articles related to SCF,
many of which were not related to model development or causal analysis of flexibility. In order
to restrict the search to articles relevant to the scope of this study, the following inclusion criteria
were used: papers published in journals and conferences, and papers answering research
questions related to SCF, degree of relationship, causal analysis, flexibility contributors.

3. Rationale behind the study

In today’s competitive environment, firms are adopting flexible supply chain strategies to
meet the market demand. The Indian personal hygiene industry is full of competition. Firms
in the sector are not aware about the different types of flexibilities applicable to their
business in terms of a supply chain. Moreover, firms have no clue of existing causal
relationship of each flexibility dimension. Once firms are aware about causal relations
between SCF dimensions, they can analyse the influence of these dimensions on overall SCF,
which is the main objective of the present research. SCF is defined to incorporate the
flexibility dimensions that directly influence the consumers and is the shared responsibility
of internal (manufacturing, marketing) and external (channel members, suppliers) functions
of the firm (Sánchez and Pérez, 2005; Dangayach and Deshmukh, 2001). Flexibility in supply
 BIJ
27,2

522

Table I.
Supply chain
flexibility dimensions
Product Volume Transhipment Coordination Material New product Sourcing Information Access Routing Physical
flexibility flexibility flexibility flexibility handling development flexibility system flexibility flexibility distribution
flexibility flexibility flexibility flexibility
Ivanov et al. (2018) | |
Chand et al. |
Fantazy and Salem | | | |
(2016)
Yu et al. (2012) | |
Yi et al. (2011) |
Wilson and Platts |
(2010)
Hua et al. (2009) |
Stevenson and | | | |
Spring (2007)
Sánchez and Pérez | | | | | | | |
(2005)
Ndubisi et al. (2005) | |
Oke (2005)
Zhang et al. (2002, |
2005)
Karuppan (2004)
Kara and Kayis |
(2004)
Lummus et al. |
(2003)
Mohamed et al.
(2001)
Lee (2001)
Parker and Wirth | | |
(1999)
Vickery et al. (1999) | | | |
Kathuria (1998)
Lambert |
Suraez |
Cooper |
Cunningham (1996)
Slack (1983, 1987)

(continued )
 Demand Expansion Labor Machine Manufacturing Operations Market Postponement Delivery Logistics Process
management flexibility flexibility flexibility flexibility flexibility flexibility flexibility flexibility flexibility flexibility
flexibility
Ivanov et al. (2018) | | | | |
Chand et al. | |
Fantazy and Salem | | | |
(2016)
Yu et al. (2012) |
Yi et al. (2011) |
Wilson and Platts
(2010)
Hua et al. (2009)
Stevenson and | | | | | |
Spring (2007)
Sánchez and Pérez | | | | |
(2005)
Ndubisi et al. (2005)
Oke (2005) |
Zhang et al. (2002, | |
2005)
Karuppan (2004) |
Kara and Kayis
(2004)
Lummus et al. | |
(2003)
Mohamed et al. |
(2001)
Lee (2001) |
Parker and Wirth | | | |
(1999)
Vickery et al. (1999) |
Kathuria (1998) |
Lambert
Suraez |
Cooper
Cunningham (1996) |
Slack (1983, 1987) |
flexibility

523
Supply chain

Table I.
BIJ S. No. Dimension Description Author(s)
27,2
1 Product Ability to produce products characterized Stevenson and Spring (2007), Sánchez
Flexibility by numerous features, options, sizes and and Pérez (2005), Kumar et al. (2006),
colors Parker and Wirth (1999), Vickery et al.
(1999)
2 Volume Ability to produce above/below the installed Stevenson and Spring (2007), Sánchez
524 flexibility capacity for a product and Pérez, Parker and Wirth (1999),
Vickery et al. (1999)
3 Transhipment Ability to transfer the products among Sánchez and Pérez (2005)
flexibility stocking locations
4 Coordination Ability to develop of relationship Yu et al. (2012), Wilson and Platts (2010),
flexibility management processes between partners Sezen and Yilmaz (2007)
through integrative capabilities
5 Material Ability to move the product in different Kara and Kayis (2004), Lummus
handling ways within a manufacturing facility et al. (2003)
flexibility
6 New product Ability to introduce new products with new Kumar et al. (2007), Kumar et al. (2006),
development/ features and new style Ndubisi et al. (2005), Sánchez and Pérez
launch flexibility (2005), Vickery et al. (1999)
7 Sourcing Ability to have multiple suppliers for one Kumar et al. (2007), Sánchez and Pérez
flexibility product (2005), Kumar et al. (2006), Yi et al. (2011)
8 Information Ability of an organization’s collective Kumar et al. (2007), Stevenson and Spring
system flexibility information system to adapt and support (2007)
changing requirements of the business
functions
9 Access flexibility Ability to provide a widespread or intensive Hua et al. (2009), Sánchez and Pérez
distribution coverage (2005)
10 Routing Ability to vary the path, a product may take Stevenson and Spring (2007), Sánchez
flexibility through the manufacturing system and Pérez (2005), Parker and Wirth (1999)
11 Physical Ability to change distribution processes Yu et al. (2012), Zhang et al. (2002, 2005),
distribution Vickery et al. (1999), Cooper et al. (1997),
flexibility Lambert et al. (1998)
12 Demand Ability to enhance its responsiveness by Yu et al. (2012), Zhang et al. (2002), Lee
management satisfying the variety of customer needs for (2001)
flexibility service, delivery time and price
13 Expansion Ability to expand the capacity of the system Stevenson and Spring (2007), Parker and
flexibility Wirth (1999)
14 Labor flexibility Ability to assign varying number of Yazici (2005), Karuppan (2004)
operators as needed
15 Machine Ability of a machine to perform various Stevenson and spring (2007), Mohamed
flexibility tasks et al. (2001), Parker and Wirth (1999),
Suarez et al. (1996)
16 Manufacturing Ability to change levels of production, to Kumar et al. (2007), Oke (2005), Yazici
flexibility develop new products more quickly (2005), Kathuria (1998), Slack (1983, 1987)
17 Operations Ability to produce a product in different Yi et al. (2011), Stevenson and Spring
flexibility ways (2007), Parker and Wirth (1999)
18 Respond to Ability to respond quickly to the need of Kumar et al. (2006), Sánchez and Pérez
market flexibility market (2005), Vickery et al. (1999)
19 Postponement Ability to keep the product in its original Sánchez and Pérez (2005)
flexibility form till the delivery
20 Delivery Ability to fix the delivery of product as per Stevenson and Spring (2007), Kumar et al.
flexibility the customer’s wish and adjust the lead time (2006), Sánchez and Pérez (2005)
accordingly
21 Logistics Ability of a firm to respond quickly and Kumar et al. (2007), Stevenson and Spring
flexibility efficiently to changing customer needs in (2007), Sánchez and Pérez (2005), Zhang
inbound and outbound delivery, support et al. (2005), Cunningham (1996)
Table II. and services
Supply chain 22 Process Ability of producing different kind of Stevenson and Spring (2007), Sánchez
flexibility description flexibility products using the same facilities in and Pérez (2005), Parker and Wirth (1999)
from literature production system
Journal name No. of papers
Supply chain
flexibility
International Journal of Operational Production Management 11
Journal of Operations Management 9
International Journal of Logistics Management 8
International Journal of Production Research 8
Benchmarking: An International Journal 5
Supply Chain Management: An International Journal 4 525
International Journal of Production Economics 3
Global Journal of Flexible Systems Management 3
Management Science 2
Industrial Management & Data Systems 2
Journal of Manufacturing Technology Management 2
Journal of Enterprise Information Management 2
European Journal of Operational Research 1
Management Science Letters. 1
International Journal of Physical Distribution & Logistics Management 1
Business Process Management Journal 1
Strategic Outsourcing: An International Journal 1
The Journal of Operational Research Society 1
Production Planning & Control 1
International Journal of Productivity and Performance Management 1
Logistics Information Management 1
International Journal of Industrial and Systems Engineering 1
Decision Sciences 1
Journal of Modelling in Management 1
Operations Research 1 Table III.
Journal of Supply Chain Management 1 List of journals for
Total 68 literature review

chain is a prospective font to enhance the firm efficiency and can be a substantial measure of
supply chain performance (Gawankar et al., 2017; Sánchez and Pérez, 2005; Vickery et al.,
1999). The researchers has identified quite a few dimensions of SCF (Barad and Sapir, 2003;
Van Hoek, 2001; Lee, 2001; Narasimhan and Das, 2000). For instance, physical distribution
flexibility helps in offering customized services at an economical price to consumer (Zhang
et al., 2005; Van Hoek, 2001). Further, demand management flexibility aids businesses to
respond fast and effectively with appropriate cost and delivery time (Zhang et al., 2005; Lee,
2001). The remaining SCF dimensions are described in Table II with their meaning. There is
a sparse in the literature about SCF studies, especially for the entire supply chain where 22
dimensions of flexibility in supply chain are considered. The studies have been conducted in
the sectors like automotives, and they have observed the impact of SCF on firm performance
(Katiyar et al., 2015; Merschmann and Thonemann, 2011; Simaei and Jolai, 2006; Sánchez
and Pérez, 2005). However, the current study is about accessing the causal relationship of
supply chain flexibilities with reference to the Indian personal hygiene industry. Once a
causal relationship is identified, an investigation is done to understand the contribution of
different flexibility dimensions on overall SCF. The present research may help the
practitioners to adopt the right mix of flexibilities for efficient and effective supply chain
performance. Figure 1 explains the rationale and research framework for the study.

4. Research design
4.1 Data collection
In the present study, data collection has been done in three phases. Phase 1 is the data
collection to find out the SCF dimensions, having a significant impact on case firm performance
BIJ Supply Chain Flexibility
Dimensions (22)
27,2 Product Flexibility
Personal Hygiene Industry SC
Flexibility Dimensions (11)
Influencing Flexibilities (3)
Volume Flexibility Coordination Flexibility
Product Flexibility

Volume Flexibility Flexible Supply Chain

Demand Flexibility
526 for case firm

Physical Distribution
Flexibility
Process Flexibility
Logistics Flexibility
Figure 1. Expansion Flexibility
Rationale and
Process Flexibility
research framework

(to find out relevant SCF dimensions for personal hygiene industry through brainstorming
session with industry experts). Phase 2 is about data collection for the DEMATEL
methodology (to establish a degree of relationship among dimensions). Phase 3 is about the
data collection for structural equation modeling (to develop a final causal model of SCF).

4.2 Respondent profile for phase 1 and phase 2

The respondents for the phase 1 and phase 2 belong to different departments under
the supply chain and are impacted by demand variability from market. Table IV
indicates the profile of respondents. In sum, 23 industry experts with an average
experience of 19.8 years working for six different firms belonging to the personal hygiene
industry participated in a brainstorming session. The panel also consists of three
academicians/researchers with average experience of 24 years working on performance
measurement of a flexible supply chain. The average experience of industry experts is
shown in the table.
In phase 1, a brainstorming session was conducted wherein experts were asked about
SCF dimensions that seem to have significant amount of influence on supply chain
performance. Since the study is more case oriented on one industry, it was suggested to have
the brainstorming session at an initial stage to confirm the relevant dimensions. The aim
and rules of brainstorming were explained to the group (Morgan, 1997). The rules include

Professionals from industry/academics Participation in expert interview

General manager 1
Plant manager 5
Procurement manager 5
Quality control 2
ERP manager 2
Logistic controller 1
Engineer (product division) 4
Manager (distribution) 1
Marketing manager 2
Industry total 23
Table IV.
Executive details Academic/researcher 3
participated in Grand total 26
interview/ Experience range 3–28 years
questionnaire survey Note: In Phase 2, responses from academic personnel/researchers were not taken
that people are told what the aims of the session are before they come to it so that they can Supply chain
start to think about possible contributions to the problem under discussion. Experts in the flexibility
brainstorming session were asked to select the SCF dimensions which are relevant in
context of the Indian personal hygiene industry. Table V indicates the feedback received
from experts and it can be inferred that 21 participants feel that product flexibility has a
significant amount of influence on supply chain performance with respect to the Indian
personal hygiene industry and should be considered for further analysis followed by 527
sourcing flexibility, manufacturing flexibility and so on.
From Table V, authors have selected those flexibility dimensions that have s minimum
score of 10, i.e. coordination, volume, Physical distribution, sourcing, new product, demand
management, product, manufacturing, respond to market, process and expansion flexibility
dimension of supply chain.
After phase 1, 11 SCF dimensions were found relevant for further analysis after a
brainstorming session with experts and their current relevance to their firms. The experts
advised to not to consider the areas of flexibility, either those are in its initial stages of
development or have less emphasis in the personal hygiene industry. Therefore, the
flexibilities in the areas of transshipment, material handling, information systems, access to
different types of data and procedures, routing, labor scheduling, allocating work to
equipment and machines, delivery, logistics and postponement has been found out of the
scope at present for the chosen industry. On probing further on modern information
systems such as Big Data, Internet of Things (IoT), artificial intelligence (AI) and
Blockchain, the experts indicated that they are just watching few of the leading players in
their industry to adopt and utilize first and they may follow on the basis of cost-benefit
analysis for their supply chain operations in near future. This resulted in 11 flexibility
dimensions indicated in Table VI. In Phase II of data collection, the authors designed a
pairwise comparison matrix of all 11 dimensions to prioritize those SCF dimensions using
DEMATEL.

S. No. Dimension Responses

1 Product flexibility 21
2 Volume flexibility 16
3 Transhipment flexibility 3
4 Coordination flexibility 14
5 Material handling flexibility 2
6 New product development/launch flexibility 13
7 Sourcing flexibility 20
8 Information system flexibility 6
9 Access flexibility 3
10 Routing flexibility 4
11 Physical distribution flexibility 19
12 Demand management flexibility 14
13 Expansion flexibility 11
14 Labor flexibility 4
15 Machine flexibility 4
16 Manufacturing flexibility 18
17 Operations flexibility 6
18 Respond to market flexibility 13
19 Postponement flexibility 2
20 Delivery flexibility 5 Table V.
21 Logistics flexibility 6 Feedback from
22 Process flexibility 12 experts
 BIJ
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528

matrix
Table VI.
Direct-influence
Supply chain Physical New product Demand
flexibilities Coordination Volume distribution Sourcing development management Product Manufacturing Market Process Expansion SUM

Coordination 0.00 2.78 3.19 1.87 0.83 3.20 3.44 3.19 1.73 2.17 2.90 25.3
Volume 1.29 0.00 1.14 2.71 3.73 3.22 2.48 3.16 2.42 2.37 2.47 24.99
Physical 3.17 1.12 0.00 2.67 3.49 3.43 3.21 1.74 2.93 1.28 3.22 26.26
distribution
Sourcing 0.76 1.12 3.14 0.00 2.41 2.63 2.17 1.73 1.22 0.27 1.98 17.43
New product 1.23 2.59 2.68 1.63 0.00 3.70 3.88 2.66 3.74 3.44 3.22 28.77
development
Demand 3.77 2.62 3.44 2.59 2.23 0.00 3.23 3.32 2.84 2.67 2.89 29.6
management
Product 2.92 1.33 2.34 3.17 3.21 1.23 0.00 2.49 1.87 2.33 3.14 24.03
Manufacturing 3.13 3.77 3.42 2.34 1.12 1.33 2.88 0.00 2.77 3.22 1.64 25.62
Market 3.11 0.89 1.23 2.67 3.32 2.62 2.48 2.37 0.00 0.53 2.89 22.11
Process 2.5 3.27 2.34 1.49 0.65 3.24 2.98 2.19 1.14 0.00 0.45 20.25
Expansion 2.46 2.96 2.6 2.98 1.77 2.39 3.66 2.78 3.15 2.35 0.00 27.10
SUM 24.34 19.67 22.33 22.25 21.93 23.79 26.97 22.44 22.08 18.46 21.9
4.3 Methodology and analysis Supply chain
To select the appropriate article related to a flexible supply chain, multiple databases were flexibility
searched including Google Scholar, Ebscohost, Emerald, Wiley, Google Scholar and Science
Direct using keywords “Flexible supply chain,” “Supply Chain Flexibility,” “Manufacturing
Flexibility,” “Logistics Flexibility,” “Distribution Flexibility,” “Product flexibility,” etc. The
search included only articles published in English. The study focused on literature published
between 1983 and 2017.The majority of articles were drawn from peer-reviewed international 529
journals. The authors have tried their best to ensure a completeness of review with respect to
flexible supply chain literature. Authors then extracted all possible dimensions (22) of SCF
which later on reduced to 11 dimensions, which are relevant to the personal hygiene industry
after the brainstorming session with the experts. Authors have prioritized these 11
dimensions and came up with a cause-and-effect relationship with the use of DEMATEL.
Three supply chain dimensions, i.e. demand management flexibility, product flexibility and
physical distribution flexibility, come out as most influencing on supply chain performance in
the context of the Indian personal hygiene industry. Once the cause-and-effect relationship
among three supply chain flexibilities has been established, authors have extracted sub-
factors of these three dimensions and formulated a structural equation model (SEM). Figure 2
shows the steps of the methodology being used in the current study.
Previously, Singh et al. (2017) used interpretive structural modeling to analyze
interaction among various dimensions of SCF and categorized it in two segments: driving
factors and dependent factors. Um (2017) used cluster analysis and SEM to investigate the
impact of increased variety management services on SCF. Fredriksson and Wänström
(2014) used a case study approach to explore how the manufacturing and SCF impact on the
ability to transfer production between the units. Fayezi and Zomorrodi (2015) used a
systematic qualitative data analysis approach grounded on the cross-interview synthesis

Literature Review

Gap identification
and Formulation of
Objectives

For Significant dimension selection w.r.t.

Brainstorming with
Personal Hygiene Industry
Experts

To analyze the causal relationships among

DEMATEL various dimensions

To determine influence of the major

Structural Equation flexibility measures on the overall supply
Model chain flexibility

Analysis, Results Figure 2.

and Discussion Methodology adopted
BIJ role of relationship integration in developing supply chain agility and flexibility. Singh and
27,2 Acharya (2014) used the DEMATEL methodology to evaluate and map the causal
relationship among various SCF dimensions. In the present study, the authors have used
DEMATEL to establish initial causality and SEM to investigate the contribution of different
flexibility dimensions on overall SCF.
4.3.1 DEMATEL methodology. The DEMATEL approach developed here serves as an
530 important roadmap for making strategic decisions that help in creating a long-term
environment for a flexible supply chain. In order to deal with the complex issue of an
uncertain environment, uncertain demand pattern, highly volatile customer needs, etc., in
soap manufacturing, it is often essential to find out the most influential dimension of
flexibility so that uncertainty can be dealt with in a better way. Another important feature is
the influence relation map among the multiple dimensions. It gives an idea which flexibility
dimension is having influence on another flexibility dimensions. The hierarchal structure of
these factors gives an upper edge to deal with the problem in a systematic manner. Top
management, with the help of this model, forms a strategy to build a favorable
organizational culture and develop human resource to bring about required changes for a
flexible supply chain scenario.
DEMATEL is a comprehensive method for constructing and analyzing a structural
model of the causal relationships between the complex and numerous factors (Lin and Lin,
2008). The DEMATEL technique is used to analyze the causal relationships among various
complex factors (Singh and Acharya, 2014). According to Falatoonitoosi et al. (2013), the
DEMATEL process is a visual demonstration of the impact–relations map by which
respondents organize their own actions in the world:
• Step 1: finding the direct-influence matrix: the first step in DEMATEL is to calculate
the direct-influence matrix with the help of expert views .A scale of 0–4 is used to
solicit the expert response. Each expert is asked: “To what degree does factor i affect
factor j?” The initial direct-relation matrix D ¼ [dij]n×n is obtained through pair wise
comparisons in terms of influences and directions between criteria, in which n
denotes the number of criteria (Shen et al., 2012). If there are n variables that impact
the system, a direct-influence matrix will look like:

• Step 2: normalize the direct-influence matrix: on the basis of the direct-influence matrix D,
the normalized direct-influence matrix N is acquired by using the following equations:
" #
1 1
m ¼ min P ; P ; (1)
max nj¼1 dij max ni¼1 dij

D
N¼ : (2)
m
 • Step 3: obtain total-influence matrix: once the normalized direct-influence matrix N Supply chain
by summation for i or j is obtained, the total-influence matrix T is arrived by using flexibility
the following equation:

T ¼ N þN 2 þN 3 þN 4 þN 5 þ. . . þN q
 h oi
¼ N I þN þN 2 þN 3 þN 4 þ. . . þN q1 ðI N ÞðI N Þ1 531
¼ N ðI N q ÞðI N Þ1 ;
Then:

T ¼ N ðI N Þ1 ; (3)
where I is the identity matrix.
4.3.1.1 Development of matrices. Table VI shows the direct-influence matrix, whereas
Table VII presents the normalized direct-influence matrix. Table VIII shows the total
relationship matrix.
The sum of rows is denoted by d and the sum of columns is denoted by R through
Equations (4)–(6). The addition of d and R reveals the relative importance of each criterion.
And the subtraction of d and R divides the flexibilities into two groups: cause group and
effect group. When (d–R) is positive, that particular flexibility dimension belongs to the
cause group, and when (d–R) is negative, that flexibility belongs to the effect group.
Therefore, the causal diagram can be obtained by mapping the data set of (d+R, d–R).
Table IX indicates the degree of influence of SCM flexibilities:
 
T ¼ t ij nn: ; i; j ¼ 1; 2; 3; 4. . .; n; (4)

" #
Xn
d¼ t ij ¼ ½t i: nx1 ; (5)
j¼1

" #
Xn  
R¼ t ij ¼ t j: 1xn ; (6)
i¼1

where d and R, respectively, denote the sum of rows and the sum of columns from total
relation matrix T ¼ [tij]n×n.
4.3.1.2 Causal diagram. The inter-relationships among the dimensions and criteria are
obtained using DEMATEL. The DEMATEL survey took place in a firm belonging to THE
Indian personal hygiene industry. Initially, the direct-influence matrix d and the total-
influence matrix T were obtained. The influence of the factors of interest in this study is
shown in Table IX. Based on the above analysis, a comprehensive impact relation map can
be generated, as illustrated in Figure 3.
The values di, ri, di+Ri and di–Ri represent the relationships among the criteria. The di
value reflects the influence on other factors, while the Ri factor reflects the influence from other
factors. di+Ri represents the degree of the relationship between factors, while di–Ri represents
the degree of the effect. Essentially, a high di+Ri suggests a strong significance, while a high
di–Ri indicates a strong relationship with other criteria (Singh and Acharya, 2013).
In Table IX, the value of d+R shows the importance of the flexibility dimension,
according to the experts that participated in the present study from the Indian personal
 BIJ
27,2

532

Table VII.
Normalized direct-
influence matrix (N)
Supply chain Physical New product Demand
flexibilities Coordination Volume distribution Sourcing development management Product Manufacturing Market Process Expansion

Coordination 0.00 0.093 0.107 0.063 0.02 0.108 0.116 0.107 0.058 0.073 0.097
Volume 0.043 0.00 0.038 0.091 0.126 0.108 0.083 0.106 0.081 0.080 0.083
Physical 0.107 0.037 0.00 0.090 0.117 0.115 0.108 0.058 0.098 0.043 0.108
distribution
Sourcing 0.025 0.037 0.106 0.00 0.081 0.088 0.073 0.058 0.041 0.009 0.066
New product 0.041 0.087 0.090 0.055 0.00 0.125 0.131 0.089 0.126 0.116 0.105
development
Demand 0.127 0.088 0.116 0.087 0.075 0.00 0.109 0.112 0.095 0.090 0.097
management
Product 0.098 0.044 0.079 0.107 0.108 0.041 0.00 0.084 0.063 0.078 0.106
Manufacturing 0.105 0.127 0.115 0.079 0.037 0.044 0.097 0.00 0.093 0.108 0.055
Market 0.105 0.030 0.041 0.090 0.112 0.088 0.083 0.080 0.00 0.017 0.097
Process 0.084 0.110 0.079 0.050 0.021 0.109 0.100 0.073 0.038 0.00 0.015
Expansion 0.083 0.100 0.087 0.100 0.059 0.080 0.123 0.093 0.106 0.079 0.00
Supply chain Physical New product Demand SUM
flexibilities Coordination Volume distribution Sourcing development management Product Manufacturing Market Process Expansion (d)

Coordination 0.385 0.430 0.494 0.439 0.376 0.501 0.566 0.491 0.423 0.391 0.474 4.97
Volume 0.421 0.346 0.433 0.459 0.465 0.502 0.537 0.489 0.444 0.399 0.460 4.955
Physical 0.499 0.397 0.418 0.480 0.477 0.530 0.585 0.470 0.479 0.381 0.508 5.224
distribution
Sourcing 0.304 0.284 0.386 0.276 0.335 0.375 0.404 0.340 0.312 0.246 0.346 3.608
New product 0.477 0.470 0.529 0.482 0.402 0.571 0.641 0.529 0.532 0.472 0.532 5.637
development
Demand 0.558 0.481 0.565 0.519 0.478 0.471 0.635 0.559 0.514 0.457 0.537 5.774
management
Product 0.449 0.371 0.451 0.455 0.431 0.428 0.441 0.451 0.410 0.379 0.463 4.729
Manufacturing 0.475 0.457 0.496 0.450 0.391 0.450 0.547 0.392 0.449 0.417 0.436 4.51
Market 0.437 0.340 0.399 0.422 0.416 0.444 0.493 0.428 0.333 0.310 0.438 4.46
Process 0.391 0.382 0.397 0.357 0.312 0.430 0.467 0.392 0.337 0.265 0.333 4.063
Expansion 0.480 0.454 0.498 0.492 0.432 0.502 0.598 0.502 0.485 0.413 0.409 5.265
SUM (R) 4.876 4.412 5.066 4.381 4.515 5.204 5.914 4.043 4.718 4.13 4.963
flexibility

533
Supply chain

Total relationship
matrix
Table VIII.
BIJ S. No. Dimension d R d+R d–R
27,2
1 Coordination 4.97 4.876 9.846 0.034
2 Volume 4.955 4.412 9.367 0.543
3 Physical distribution 5.224 5.066 10.29 0.158
4 Sourcing 3.608 4.381 7.989 −0.773
5 New product development 5.637 4.515 10.152 1.122
534 6 Demand management 5.774 5.204 10.978 0.570
7 Product 4.729 5.914 10.643 −1.185
8 Manufacturing 4.51 4.043 8.553 0 .467
Table IX. 9 Market 4.46 4.718 9.178 −0.258
Degree of influence of 10 Process 4.063 4.13 8.193 −0.067
SCM flexibilities 11 Expansion 5.265 4.963 10.228 0.302

d-R (Intensity)
1.5
d+R (Nature)
5
1
2 6
0.5 11

8 1 3
0 10
0 2 4 6 8 9 10 12
–0.5
4

–1 7
Figure 3.
Causal map
–1.5

hygiene industry. From Figure 3, it can be said that demand management flexibility is the
most critical flexibility dimension to manage in order to improve supply chain performance
followed by product flexibility and physical distribution flexibility.
Demand Management deals with the quick response to customer demand; design the
product as per customers’ wish and also make the product available on the date and time
customer wants. To achieve this, a high degree of synchronization with suppliers and all
supply chain partners is required. Physical distribution is the second most important
dimension, which deals with distributing the product to sales outlets. Usually, firms in the
personal hygiene industry use third-party logistic services for delivery of the product.
Flexibility in the distribution process can be achieved by attaching multiple 3PL providers.
Also, replenishment of the goods through transshipment strategy from one warehouse (of
more capacity) to another warehouse (of low capacity) helps in fastening the distribution
process. Product comes out as one of the third most important dimensions to deal with. To
achieve product flexibility, a firm needs to establish a system where a variety of products (in
terms of size, color, packaging, etc.) can be produced. India is a country where people from
diverse background live and have different choices; therefore, differentiation among
products is needed to attract a large number of customers.
Overall, from the results of segmenting the list of critical factors, it means that these supply
chain flexibilities require a high level of focus on the cause group (1, 2, 3, 5, 6, 8, and 11) rather
than the effect group (4, 7, 9 and 10); cause group factors are considered as controlling
variables in order to achieve and maintain flexibility, hence they require more attention.
Further, through this causal diagram (Figure 4), it can be inferred that among these 11 Supply chain
dimensions of supply chain flexibilities, demand management flexibility (6) is the most flexibility
important factor by the highest (d + R) priority of 10.978.
Since, from the DEMATEL analysis, the three criteria with the highest di+Ri values are
demand management, product and physical distribution. The causal relation among these
three SCF dimensions (on rest of the dimensions) can be better explained by Figure 4.
After removing all dimensions except demand management, product and physical 535
distribution the simplified causal relation would look like the one given in Figure 5.
Thus, the study resulting in the DEMATEL model identifies and evaluates supply
chain flexibilities, prioritize them and finally study the relationship between these
flexibilities and the degree to which they affect or are affected by one another in the Indian
personal hygiene industry.
4.3.2 Structural equation modeling. After getting a causal relation among three major
flexibility dimensions from the DEMATEL, a conceptual structural model has been
developed. This model presents the influence of the three flexibility measures on the overall
SCF. In recent times, the concept of SCF for process industries has become a critical issue
because of the uncertainty present in the business environment, and attracts the
researcher’s attention significantly. Three SCF dimensions, i.e. product flexibility, demand
management flexibility and physical distribution flexibility, were found mostly fitting in the
specific case of personal hygiene industry’s supply chain performance: 281 participants of
22 different firms have participated with an average age of 32 and average experience of
12 years. Table X indicates the measures of flexibility dimensions. Table XI shows the
profile of working executives that participated in the survey (Table XII).

Demand
Management
Sourcing

NPD

Distribution
Expansion
Manufacturing
Volume Market

Process Coordination

Figure 4.
Causal relationship
Product among various
flexibility dimensions

Demand
Management

Figure 5.
Causal relation among
three major flexibility
Distribution Product dimensions
BIJ Flexibility dimensions (latent variable) Indicators Measures
27,2
Flexibility measure m –
Product P1 No. of sizes
P2 No. of colors
P3 Variety of product
P4 Product quality
536 P5 Numerous features
Demand management DM1 Lead time
DM2 Fix delivery date as per customer wish
DM3 Ability to synchronize to customer delivery times
DM4 Implementation of quick response
Physical distribution PD1 Sales outlet network
PD2 Vehicle strength
Table X. PD3 Warehouse capacity
Measures of flexibility PD4 Multiple delivery mode
dimensions PD5 Third-party logistics

Professionals from industry/academics Participation in expert interview

General manager/CEO/MD 7
Production manager 55
Procurement manager 17
Engineer 37
Executives from procurement department 29
Manager/executives (supply chain) 16
Shop floor executives 28
Manager (planning) 2
Manager (marketing and sales) 23
Table XI. Executives (logistics) 27
Participant profile of Others 40
data collected from 22 Total participants 281
firms for SEM Average experience 12 years

No. of firms participated 22

Turnover (in Rs) No. of firms with turnover less than Rs100m 7
No. of firms with turnover in between Rs100m to Rs500m 9
No. of firms with turnover less than Rs500m 6
Products (in no.) No. of firms producing less than 5 personal hygiene products 3
No. of firms producing 5–8 personal hygiene products 8
No. of firms producing more than 8 personal hygiene products 11
Table XII. Employees (in no.) No. of firms with less than 100 on roll employees 6
Demographic details No. of firms with 100–300 on roll employees 10
of firms No. of firms with more than 300 on roll employees 6

The SEM paradigm has been chosen or the purpose of causal analysis, which explains the
extent of SCF in the industry from various converging measured indicators and latent
factors. Based on the extensive literature review and questionnaire survey, a conceptual
model for SCF has been developed. The model is tasted with the data obtained from
questionnaire responses. A user-friendly IBM-AMOS 21.0 has been used in the study to
develop the SEM. An SEM with the extant latent variable (represented by three dimensions
of flexibilities) and their corresponding indicators are shown in Figure 7. Table XIII Supply chain
indicates the model-fit indices obtained after running the model. flexibility
The conceptual model that is developed is shown in Figure 6.

5. Findings
After running the SEM developed for SCF, with the data table obtained from questionnaire
responses, the output path diagram is as shown in Figure 7 with the unstandardized regression 537
weights and error values shown alongside the variable and path. With the help of modification
indices, covariance between error terms has been introduced to improve the model-fit
measures. Since the latent variable flexibility has only one indicator, the error term for that
single indicators variable is considered to have a mean of 0 and a variance of 0. This is because
when using a single indicator, one must assume that the item is measured without error.
The SEM is typically used to model causal relationship among the latent variables.
Various model-fit statistics obtained while running the model, such as χ2 value, goodness-of-
fit index and root mean square error of approximation, are presented to show the goodness-
of-fit of the model. Regression coefficient, found from the result, shows the relationship
between the latent factor and its indicators. The model R2 value gives the proportion of
variation in the dependent variable explained by the regression model. In the model
developed for SCF, “flexibility” has three latent variables in “product,” “demand
management” and “physical distribution.” Indicators under product are “size,” “color,”

FIT index Value for supply chain flexibility Recommended values

χ2 246.762 na
df 82 na
GFI 0.889 W 0.8
CMIN/df 3.00 o3 (excellent), o5 (good)
TLI 0.808 W 0.8
CFI 0.850 W 0.8 Table XIII.
RMSEA 0.085 o0.10 Model-fit indices

0
e18 1 0
m 1 e15
Flexibility
1

0.1

Physical
Product Demand Distribution
Management 1

P5 1
1 PD3
PD1 PD4 PD5
P4 DM4
P3 1 DM3 PD2
P2 1 1
P1 1 1 1
e5 DM1 1
1
1 DM2
1
1
e11 e12 e13 e14 Figure 6.
1 e4 e10 Conceptual model of
e3 1 1 e9
e1
e2 e8 supply chain
e7 flexibility
e6
BIJ e18
0.00
1
m
27,2 1.00
1
e15
0.00

Flexibility

29.75 31.69
0.10 –42.67

538 0.13 0.16 0.22 0.15 0.11

Product Demand Management Physical Distribution

1.54
1.28 1.55
1.16 2.16
P5 1.60
1.43 1.03 1.00
1.63 1.27 PD1 PD2 PD3
1.00 P4 1.00
1 0.72 1
DM4 0.67 1 1 PD4
P3 1 0.75 0.49
DM2 e10
0.55
e5 e11 0.41
P1 P2 1
DM3 1
PD5
1 e12
e4 0.18 0.53
Figure 7. 0.56 DM1 1 1
0.91 1
1 e3 0.57 e13
Output SEM model 1
1.38 0.47 e8 e9
0.20 0.81
1 e14
of supply chain 0.65 e2 0.62 e7 0.16
flexibility 0.23
e6
0.10
e1

“variety,” “quality,” “numerous features.” Indicators under physical distribution are

“geographical spread of network,” “vehicle strength,” “warehouse capacity,” “third-party
logistics,” “alternative delivery mode.” Indicators under latent variable “demand
management” are “lead time,” “delivery date,” “delivery time,” “quick response.” A single
indicator m (i.e. flexibility measure) has been used to explain latent variable “flexibility.”
Model-fit statistics confirms that the model fits reasonably well, is theoretically consistent
and provides statistically significant parameter estimates. The model shows a strong
influence of latent factor “product” on SCF. The main reason behind it is that the firm goes for
a flexible supply chain structure to cater the ever changing demand of a product from the
customer side. Also, people from different parts of country have different likes and dislikes. It
is evident from Figure 7 that the latent variable “product flexibility” comes out as a greater
influencer toward SCF. The latent variable “physical distribution flexibility” also shows
significant influence on flexibility. Physical distribution should be flexible enough to make the
reach of the product on time/date what the customer has provided by using different delivery
modes or by taking services of third-party logistics provider. Distribution flexibility, which
includes warehouse locations, transportation network and mode of transportation, is a key
dimension to enhance supply chain performance significantly (Singh et al., 2017). The latent
variable “demand management” shows a strong influence on SCF. It helps the firms to shrink
the variability in demand and increase the operational flexibility. An increase in flexibility
helps organizations to respond to the external and internal environment. The variability,
which is customer-driven, is often unavoidable, but the practices which lead to high variability
need to be eliminated. The firms need to have a contingency plan, when there are disturbances
to the planned operations. The demand management has a direct impact on the success of a
firm, including its suppliers and customers.

6. Discussion
The study has multiple implications for practitioners. In the volatile, uncertain, complex and
ambiguous world, it is necessary to have flexibility in the entire supply chain to meet the
demand at every node. With the availability of multiple brands in the personal hygiene
industry in India, it is essential for the firms to develop a production system which has the
flexibility to absorb the fluctuation in demand. Adopting the flexibility at the outbound,
inbound and in-house production system helps firms to produce the product at a minimum Supply chain
cost. The study finds that 11 dimensions have influence on their supply chain (Table VI) and flexibility
answers the first research question. The scholarly and managerial implications can be found
in the next sub-section.

6.1 Scholarly implications

The present study can help in improving the efficiency of a firm by providing products to 539
customers in a required quantity. There is a positive relationship between SCF and firm
performance (Dangayach and Deshmukh, 2001). The flexibility dimensions such as product,
volume, target market, access and launch have been a significant impact on the industry
(Vickery et al., 1999). Out of these five dimensions, volume, target market and launch
flexibilities have the uppermost associations with market share growth. On the other hand,
Sánchez and Pérez (2005) evaluated the relationship of SCF with firm performance in the
automotive supplier sector. They found that launch, access and target market contribute
mainly to firm performance. This is because not every flexibility dimension is important for
firm performance. Postponement flexibility is found to be critical in other studies (Das, 2011;
Kumar et al., 2008; Tachizawa, 2007; Pujawan, 2004). A study is conducted on Spanish firms
to understand their supply flexibility strategies. The results show that Spanish firms do not
have a particular methodology to achieve supply flexibility Tachizawa and Gimenez, 2010).
SCF is required due to a number of reasons, such as just-in-time, manufacturing lacking
capacity, demand volatility demand seasonality, fluctuations in manufacturing schedule.
Tachizawa and Thomsen (2007) analyzed the flexibility of the Spanish industry including
apparel, and electrical equipment, automotive and electronics. The responsiveness and
sourcing flexibility are two main types of flexibilities that have a major contribution. Their
study also advocates that flexibility contribution also depends on the type of uncertainty
that exists in the market (Van Donk and Van der Vaart, 2005; Christopher, 2000). In
comparison to other studies, the present study found the three flexibilities have influence on
overall SCF. This study has presented an enumeration of key SCF dimensions based on
extent research literature, and, with the help of responses from experienced personnel of
upper and middle management levels from the Indian personal hygiene industry, derived
the initial direct-influence matrix. This direct-influence matrix helped develop the
normalized and total influence matrix and, finally, a cause-and-effect relationship amongst
the flexibility dimensions has been established with the help of the DEMATEL
methodology. From the result (Table IX), it is very clear that demand management has the
highest degree of relationship with other flexibilities and receives maximum influence from
other SCF dimensions. Because of the changing needs of the customer, the organization
needs to make changes in its business process, manufacturing system and supply chain.
Product comes out to be a flexibility dimension having the highest degree of effect (Oke,
2013) and answers the second research question. Organizations spend a considerable
amount of money to carry out research and development activities in order to develop new
products and to neutralize the effect of changing market requirements. Demand
management comes out to be the most prominent flexibility dimensions. DEMATEL in
the present study is used to map the causal relationship among the dimensions and to
prioritize dimension on the basis of their degree of relationship (degree of interaction) with
other dimensions (Singh and Acharya, 2013). SEM indicates that SCF is impacted majorly
by product and physical distribution and answers the third research question.
Demand management process helps in balancing the customer requirements with
respect to the competencies of a supply chain. The demand management helps forecasting
to synchronize with the firm’s procurement, production and distribution proficiencies. This
helps the firms to plan proactively in stable demand scenarios and react in an uncertain
environment. Demand management will help in enhancing the sales and customer loyalty
BIJ when firms are able to provide right products on the shelves in the market. According to Um
27,2 (2017), in a high-customization context, close customer relationships are the most effective
way to increase SC flexibility, as it leads to generate exact demand.
Product flexibility is the ability of a firm to produce or introduce novel products and
modify the existing one. The product flexibility also addresses that how a firm can produce
manifold products on the same installed capacity. Product flexibility also questions if a firm
540 is able to rearrange the capacity among products to meet the demand. Customer influence
on the demand ignites the product flexibility. Product flexibility of a firm shows that how a
firm can produce, periodically or simultaneously, multiple products in steady operating
mode. The quick changeover from one type of product to the other also defines the product
flexibility level of the firm. Product flexibility is different from industry to industry due to
the different demand uncertainty, demand variability and customers influence on the lead
time. Fantazy et al. (2009) found that there is a direct effect of strategy on flexibility and
flexibility on performance, and also that firms must invest time and resources in developing
a new product that will lead to enhancing their flexibility as well as improves the firm’s
performance. Authors also suggested that product flexibility can be achieved by achieving
the best coordination among all supply chain partners.
On the other hand, physical distribution flexibility is the capability of a firm to regulate
packaging, warehousing, inventory and transportation of goods quickly toward the customer.
Physical distribution flexibility also includes how effectively and efficiently the raw material
and finished goods are supplied. A high physical distribution flexibility can be achieved when
an organization changes its delivery from a big number of different products and still uphold
the great performance. The physical distribution flexibility and demand management
flexibility support firms to fulfill the customer requirements and therefore the firm gain a
strategic importance (Zhang et al., 2002, 2005). The physical distribution flexibility is impacted
by the supply strategy of a firm. The firm can have its own freight or third-party logistics
provider to ensure the delivery to the next level of downstream chain.

6.2 Managerial implications

The study offers a number of implications for professionals. SEM can be applied to determine
whether flexibility dimensions contribute and up to what extent. Executives can use SEM for
the purpose of causal analysis that explains the extent of SCF. In this study, SEM, with the
help of various indicators, provides the exact result, whether latent variables ( flexibility
dimensions) has positive or negative impact on SCF. The DEMATEL technique can be
applied as a roadmap for creating strategic decision in the long term for maintaining the
flexibility in a supply chain. In dealing with an uncertain demand pattern, volatile customer
needs and uncertain environment, it is essential to look out for the influential dimensions of
flexibility. This will help to manage the uncertainty in a better manner. It is also essential for
the industry/firm to understand the influence relation map between multiple dimensions. This
gives an idea which dimension is having how much influence. The hierarchal structure of
these influences gives an upper edge to deal with the problem in a systematic manner. This is
helpful for the top management to build the strategy, which favors the firm’s culture and
trains employees to bring the required changes for supporting flexibility in the supply chain.
An attempt has been made in this paper to derive the conceptual structural model from the
outcome of a DEMATEL analysis. The three flexibility measures form the key latent variables
influencing the SCF. A carefully extracted list of indicators belonging to three flexibility
measures has helped run the SEM with the response data set. The results show that product
flexibility and physical distribution flexibility has favorable influence on the SCF, while the
demand management flexibility adversely impacts overall SCF. The flexibility dimensions can
be internally defined as well as customer defined. Internally defined dimensions of flexibility
like machine and labor are translated in flexible capacities in terms of volume and mix.
This flexible capacity of volume and mix has a noteworthy influence on customer satisfaction Supply chain
(Zhang et al., 2003). It is the customer demand and their requirements that drive the entire flexibility
supply chain of an organization. This paper has made an attempt to evaluate the supply chain
flexibilities, prioritize them and evaluate the relationship amongst these flexibilities and the
degree to which they affect or are affected by one another in the Indian personal hygiene
industry. The SCF is affected by the factors such as sourcing, back shoring and offshoring.
The SCF includes product development flexibility, manufacturing flexibility, logistics 541
flexibility and spanning flexibility in overall operations of a firm. Manufacturing flexibility is
only limited to the production plant, whereas SCF has a wider scope of non-production
services. SCF is having an influence of external and internal sources. These factors can be
considered while making certain decisions in achieving the flexibility in supply chains.

7. Limitations and scope for future research

The study has few limitations. The present study is limited to the Indian personal hygiene
industry, and the results obtained can be validated through conducting the same research in
other industries as well. Future studies may generalize the findings with different industries.
The future studies can include the different tiers of suppliers to bring the flexibility in the
firm’s supply chain. The sales forecasting and reverse logistics flexibility can be other parts
to understand the overall role in SCF. Customer service flexibility, capacity flexibility, cycle
time flexibility can be considered for addressing the dynamic demands. The flexibility mix
and match options can be optimized on the basis of variation is supplier lead time, demand
patterns, the extent of modularization and base of suppliers in any supply chain. The
flexible supply chain performance can be further measured on efficiency, responsiveness,
sales growth and return on sales. The number of times a shortage is observed can also be a
measure of flexible supply chain efficiency. The usage of information technology, IoT, AI,
Blockchain or Big Data analytics may bring in flexibility into the systems, and the impact of
these dimensions can be explored through empirical research.

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Further reading
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management in supply chains”, European Journal of Operational Research, Vol. 149 No. 1,
pp. 185-196.

About the authors

Rohit Kr Singh is Assistant Professor in International Management Institute Kolkata. He has obtained
his Bachelor Degree in Mechanical Engineering, followed by his Master’s Degree in Business
Administration and PhD in the area of Supply Chain Management. He has published several papers in
journals of international and national repute, and also presented papers and chaired sessions at
international and national conferences. He has been a reviewer of prestigious international journals.
His area of interest lies in operations and supply chain management. Rohit Kr Singh is the
corresponding author and can be contacted at: rohit.singh696@gmail.com
Sachin Modgil has a PhD from NITIE, Mumbai in the area of Supply Chain and Quality, and
teaches Operations Management. His areas of interest include total quality management, operations
and production management, supply chain management, productivity techniques and Six Sigma.
He has worked with organizations like L&T, Godrej, Emami and Transpek-Silox, with over eight years
of work experience in the electrical and electronics, cosmetics, chemicals and education sectors. He is
actively involved in research and published papers in ABDC-ranked journals. He has overall more than
25 papers in national and international journals, including international and national conferences.
Dr Padmanav Acharya is Associate Professor in NITIE, Mumbai. Dr Acharya has done his MTech
and PhD from IIT Kharagpur after his BTech in Mechanical Engineering from Utkal University.
He has 18 years of teaching experience. Prior to joining ABV-IIITM, he was working as Assistant
Professor at IGIT, Sarang, Orissa. His areas of interest include software engineering and management,
business system simulation, operations management.

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