INT. J. PROD. RES., 2000, VOL. 38, NO.

17, 4521 ± 4533

Dynamic modelling of surge eŒect and capacity limitation in supply

chains

P. T. HELO{

Agile manufacturing has been de® ned as the capability of reacting to unpredict-
able market changes in a cost-eŒective way, simultaneously prospering from the
uncertainty. In many industries, vigorously changing markets are demanding
more diŒerentiated products in lower volumes and within shorter delivery
times. An uncertain environment challenges the response of supply chains. This
paper demonstrates, by using a system dynamic simulation, how agility is built
into supply chains. Three simulation models are analysed: ® rst, the demand
magni® cation eŒect in supply chain is studied. Secondly, the analysis is extended
to capacity surge eŒects. Finally, the trade-oŒbetween capacity utilization and
lead times is discussed. The analysis recommends smaller order sizes, echelon
synchronization and capacity analysis as methods of improving the responsive-
ness of a supply chain. Evidence is provided from simulation runs and established
literature. All three models are system dynamics based replications of well-known
eŒects from the research area of production control.

1. Introduction
In business economics, agile manufacturing refers to mastering the uncertainty
and change by integrating the business, employees and information tools in all
aspects of production (Gunasekaran 1998). Vokurka and Fliedner (1998) say agility
includes also the ability to operate with diŒerent production parameters and add
value for customers. According to Kidd (1998), this new business concept is based on
three observations: ® rst, a competitive environment is emerging, which causes
constant change in manufacturing; secondly, a capability of rapid response can be
a competitive advantage; and thirdly, this requires ¯ exibility and the ability to create
new capabilities.
Changing markets is a central basis proscribing a need for agility. Companies
need to cope with high seasonal ¯ uctuations in demand. Fast design changes and
complex products require special attention in ramp-up to full volume. Customers
require reasonable order-ful® lment time when production is changing to new
models, or when a high demand peak occurs (Vokurka and Fliedner 1998). In
addition, product variety has increased signi® cantly and, increased product and
component variety is a signi® cant characteristic of modern competition (Da
Silveira 1998, Frey 1994, Lee and Tang 1997). The decision to increase product
variety may be due to several reasons. For instance, large variety can be a strategic
marketing choice. Also, more ¯ exible production systems may allow a company to
produce a product mix with minor variation costs. Finally, product life cycles have
dramatically shortened (Mason-Jones and Towill 1999); companies introduce new
technologies for better product performance faster. These three characteristics are

{ University of Vaasa, Department of Information Technology and Production

Economics, P.O. Box 700, FIN-65101Vaasa, Finland. e-mail: petri.helo@uwasa.®
International Journal of Production Research ISSN 0020± 7543 print/ISSN 1366± 588X online # 2000 Taylor & Francis Ltd
http://www.tandf.co.uk/journals
4522 P. T. Helo

drivers in the need for agile manufacturing. In practice, this kind of environment
emerges in many industries. In particular, production of electronics is facing many
uncertainties in terms of technological and market changes. Manufacturing of
textiles, special machinery and even some new technology-based consumer goods,
are similar in these three terms. Accordingly, companies are required to cope with
uncertain changes in production volume, product mix, and product life cycle.
In such an uncertain environment, reacting to changes by using high inventory
levels is very expensive. Stocks are uneconomical either because of high variety or
price erosion. When technologies are changing fast, having old components, sub-
assemblies or ® nished products is very expensive. The computer industry and tele-
communications in particular have experienced this. Distribution channels thus need
to be monitored continuously. This paper aims to demonstrate agility in supply
chain by using replications of well-known supply chain behaviour. First,
Forrester’ s demand magni® cation model (Forrester 1958) is analysed. Thereafter,
Burbidge’ s surge eŒect is studied from the capacity management viewpoint
(Burbidge 1961). Finally, the most interesting dynamic behaviour of a
manufacturing plant is studied. The connection between capacity utilization and
lead-times gives an economic perspective on the judgement of response costs.
Not much work has been done on the agile manufacturing concept from strategic
and enablers points of view (Gunasekaran 1998, Baker 1996). A special need for this
approach is the development and design of future manufacturing systems. According
to Gunasekaran (1998), modelling of production is an important research area in
agile manufacturing. `Based on the nature of information and material ¯ ows in an
agile manufacturing enterprise, a more precise model and organizational structure
for agile manufacturing should be developed’ . The research problem addressed
herein is justi® ed also from a literature point of view. The proposed models connect
the existing literature work on supply chains with modern simulation tools and the
highly topical concept of agile manufacturing.

2. System dynamics
The system dynamics approach has been used to capture complex real-world
situations, which include delays and feedback mechanisms. Practical applications
include understanding market environments and assessing possible future scenarios.
Dynamic complexity is not related to number of nodes or actors concerned, but the
behaviour they create when acting together (Davis and O’ Donnell 1997). System
dynamics models have proven their applicability to analyse strategic scenarios as
well as simulation of policies and operations. System dynamics has been de® ned as `a
method of analysing problems in which time is an important factor, and which
involve the study of how the system can be defended against, or made bene® t
from, the shocks which fall upon it from outside world’ (Coyle 1996).
Alternatively, this can be de® ned `as a branch of control theory, which deals with
socio-economic systems, and that branch of Management Science which deal with
problems of controllability’ (Coyle 1996). According to van Ackere et al. (1997) the
system dynamics approach is appropriate when a system is known to include, and be
greatly in¯ uenced by, core variables that are known to adjust over time, and when
dynamic feedback is known to occur.
System dynamics stock-¯ ow diagrams are used to describe systems. The notation,
used in this paper, is in accordance with Stella formalism (Peterson 1992). Stocks (X)
are indicated by boxes and represent system states. All variables are time (t)
 Dynamic modelling of surge eVect and capacity limitation in supply chains 4523
…
X …t† ˆ dX ¢ dt ‡ X…0†

dX ˆ f …Y …t††

Y …t† ˆ g…X …t††

Figure 1. Stella notationÐ stock, ¯ ow and an auxiliary variable.

dependent functions if required. For instance, X…0† means the initial stage of stock.
Stocks integrate ¯ ows …dX†, which indicate the change of stock. Auxiliary variables
(Y) control other entities as inputs or converters g…X† (see ® gure 1).
Auxiliary variable …V† can be used to control other auxiliary parameters …W † as a
function f …V† described graphically. A small wave inside the symbol of the auxiliary
variable states this kind of relationship:
W …t† ˆ f …V …t††:

Striped stock …T† indicates a pure time delay …e† in ¯ ows:

Y…t† ˆ f …X …t ¡ e††:

The Stella simulation software package was used to construct the system
dynamics relationship among the selected processes. The modern system dynamics
approach has been used widely in similar studies: Anderson et al. (1996) used system
dynamics to analyse the economic trends of US machine tool manufacturers. Van
Ackere et al. (1997) studied the service quality of a restaurant chain under pressure
from investors. Towill studied various supply chains with system dynamics,
theoretically as well as empirically (Towill 1991, Towill 1999, Mason-Jones and
Towill 1999), and with del Vecchio (1990) he veri® ed and validated a model of a
real world supply chain. There seems to be an established number of users and
growing interest for wider applications. For a more comprehensive overview of
the simulation package and system dynamics methodology generally, see Senge
(1991), Peterson (1992), Morecroft (1992) and Davis and O’ Donnell (1997).

3. Demand magni® cation

Since late 1950s it has been known that internal structures used in multi-echelon
systems may create oscillations in demand (Forrester 1958). Forrester’ s eŒect refers
to this phenomenon, where the demand signal is ampli® ed from echelon to echelon
as orders go through the supply chain. The eŒect is emphasized especially in longer
supply chains and companies operating in the deep downstreamÐ for instance raw
material suppliers. Forrester eŒect is known also as the bullwhip eVectÐ this term
refers to the similarity between the graphical behaviour of demand and the cracking
of a whip. In some industrial sectors, concepts of a whiplash eVect and whipsaw eVect
are used (Lee, et al. 1997: 93).
4524 P. T. Helo

To illustrate the behaviour of such systems, consider a Stella model of a three-

echelon supply chain consisting of wholesale inventory, distribution centre, and
production plant. Between each inventory there is a delay caused by transportation
and order handling (® gure 2). Each echelon operates individually based on demand
information gained from upstream. This situation describes Forrester’ s famous Beer
Game model, where a brewery and distribution centre try to cope with wholesale
demand change. Ordering policy has an eŒect on system behaviour. In this model we
use a policy which pays attention to the known information from the markets and
the supplier. In addition to weekly sales from the next phase, the ordering policy for
an echelon takes the target inventory and the distribution stock level into account.
Target inventory level is considered to be constant for simplicity. The time delay in
transportation is set to be 2 between every echelon. The ordering policy takes the
delay into account as follows: Orders1 ˆ Weekly_sales ‡ (target_inventory-
(Distribution_stock))/2 . Correspondingly, the next echelons order in a similar way:
Orders_2 ˆ Despatch_1 ‡ (target_inventory-(Wholesale_stock))/2 , and Orders_3 ˆ
Despatch_2 ‡ (target_inventory-(Factory_stock))/2.
In the ® rst simulation run, the demand for product is ® rst stable (10), but then
after a time (60), it suddenly increases by 50% , and continues at this level (20). As
seen in the graph of ® gure 3, the supply chain starts to oscillate and it takes about
100 time units for the system to stabilize to a new equilibrium. Trace 1 refers to order
levels in distribution, Trace 2 to wholesale and Trace 3 is the production plant. The
demand ampli® es from echelon to echelon in the order stream as assumed. The
supply chain is not synchronistic in this case. The wholesale centre experiences
more change in orders than the actual order level in the distribution stock.
Similarly, the factory receives the ampli® ed order ¯ ows from wholesale. The brewery
manufacturing the goods suŒers from high seasonality in volume. Sometimes there is
a rush to ful® l all orders on time. On the other hand, sometime the production
capacity is not utilized completely. This kind of ordering system causes costly
capacity utilization variation and delays the depreciation of capital investments.
The control mechanism of this supply chain model can be modi® ed easily. By
adjusting the ordering policy to take the stock in transportation and inventory
correction into account the result is far more stable. The ordering should be based
on actual demand multiplied by the supplier lead time for the orders. The common
inventory target should be a variable controlled by the feedback from the actual
demand. However, the dynamics may not always be so obvious. Wilding (1998) has

Figure 2. Structure of demand magni® cation model.

 Dynamic modelling of surge eVect and capacity limitation in supply chains 4525

Figure 3. Ampli® cation of demand as transmitted along a three-echelon supply chain.

demonstrated that by using some initial values for a supply chain model a chaotic
behaviour may occur. Similar behaviour can be extracted from the demand magni® -
cation model as well. Plotting the scatter of distribution stock and factory stock
illustrates such a situation (® gure 4). The transportation delay and ordering policies
result in a `butter¯ y’ graph, a well-known system in chaos mathematics. This kind of

Figure 4. Chaotic behaviour between two echelons in the model.

4526 P. T. Helo

behaviour has been demonstrated empirically in several supply chains (HolmstroÈ m

and Hameri 1999). System dynamics simulation can show this kind of behaviour
easily without prior knowledge of high-level mathematics. The attractors, in other
words, the points of which the curve seems to round but never cross, can be seen as
well.
The demand magni® cation eŒect is often demonstrated, by simulation behaviour
with a set of stocks. However, the same model can be applied with small modi® ca-
tions to capacity selling based manufacturing, which possibly better describes the
situation in technologically changing markets. Companies not only use inventories
to hedge against demand changes but also against capacity changes. Another driver
for moving to capacity-based control is the extending product mix. As mentioned in
the introduction, use of ® nal product inventories is becoming di cult because
product variety is increasing remarkably (Youssef 1992). Secondly, short life
cycles are causing fast changes, which makes the use of inventories ® nancially
undesirable. Thirdly, competition in today’ s markets is based on delivery per-
formance and short lead times (Dugay et al. 1997, Youssef 1992). Customers are
willing to pay for fast delivery and do not accept shortages. In addition to di culties
in using inventories as demand buŒers, the required quick reaction times stress the
need for e cient capacity control. Mastering production capacity is as an essential
capability when operating in an uncertain environment.

4. Order-level variations
The capacity issue has not traditionally been connected to supply chain analysis.
However, we know from the literature that smaller lot sizes help to improve the
responsiveness of a supply chain. It is also common knowledge that lot sizing
decisions have an eŒect on capacity utilization and order-ful® lment time. Order
quantities and intervals should be designed for the whole supply chain in order to
keep the utilization high and production costs low. There are two types of ordering
systems: they can be either multiple or single cycle systems (Burbidge 1996). With
multi-cycle ordering, components are ordered at diŒerent time intervals and in
diŒerent lot sizes. Multi-cycle ordering is a very common approach in industry,
mostly due to the popularity of MRP-II and economic-order-quantity (EOQ).
Despite the good properties of multi cycle ordering, there is an undesirable eŒect
which causes variations in stock and capacity levels. When diŒerent order intervals
occur on a single machine capacity or inventory, there will be excessive peaks in
demand caused by orders being in the same phase. This phenomenon is called the
surge eŒect or Burbidge eŒect (Burbidge 1961). Order-level variation connects the
supply chain ordering policies to local capacity.
In order to illustrate the situation, consider a Stella model, where four diŒerent
order cycles with the same total volume and constant demand emerge (® gure 5). The
total demand for each time unit is 8 and the ordering system is supplying (a) 10 units
each 5 time units, (b) 20 units each 10 time units, (c) 40 units each 20 units, and
® nally (d) 5 units each 2.5 time units. Each order utilization group has an initial
value (INIT Capacity_3 ˆ 10), the orders are released in their lot-sizes by using pulse
function (Orders_3 ˆ PULSE(40,20,20) ). The production rate is similar and
constant in each group (Usage_3 ˆ 2). The utilization is a stock between two
¯ ows: orders and production rate (Capacity_4(t) ˆ Capacity_4(t ¡ dt) ‡
(Orders_4 ¡ Usage_4) * dt). Running the simulation shows very quickly this intern-
ally caused variation ampli® cation (® gure 6). A short run shows average inventory
 Dynamic modelling of surge eVect and capacity limitation in supply chains 4527

Figure 5. Surge eŒect model includes four order cycles and a smooth consumption.

Figure 6. Multi-cycle orders increasing the total variability of capacity load.

level at about 37 and standard deviation approximately 18. The result is as stated in
Burbidge’ s `ordering cycle law’: `If various components are made in a factory and
made to diŒerent time cycles, they will generate high amplitude and unpredictable
variations in both stocks and load’ (Towill 1997). For this reason, unnecessary
demand ampli® cation and peak order should be avoided by adjusting the ordering
in a chain.
The surge eŒect is an important dynamic eŒect to consider in capacity-based
supply chains. The load capacity in terms of responsiveness depends on (1) batch
4528 P. T. Helo

quantities, (2) frequencies and (3) order phases (Burbidge 1996). In terms of
reactivity and predictability, big order lot sizes with long lead times are the most
problematic, since adjusting an order to a new level should be done far more in
advance than in the case of small batches. This has been noted by Burbidge (1961:
780), who concluded `the ``¯ exibility’ ’ of a material ¯ ow, or its ability to follow
demand ¯ uctuation, again depends on batch quantity, frequency and phase.’

5. Capacity based supply chain model

Traditionally, supply chains analysed in the literature concern inventory-based
systems which operate with make-to-stock principles. Capacity-constrained supply
chains have been studied by Evans and Naim (1994) who simulated the chain
behaviour under diŒerent policies. In agile manufacturing, the competitive
advantage of manufacturing is gained via ¯ exibility and the ability to react
rapidlyÐ this capability is known as market responsiveness. Additionally, this
should be done in a cost eŒective way. BuŒering against changes by using inventories
is di cult as the product mix consists of a number of products with small sales
volume and short technological life cycle. When companies at the same time are
focusing on their core competencies by outsourcing non-critical activities, it is
obvious that supply chains will become longer.
The ® rst step to enhance the demonstrated model is to add a mechanism handling
trade-oŒbetween lead time and capacity utilization. Transportation time of the ® rst
model can be replaced by the order-ful® lment time. In other words, higher order
backlog causes longer delivery time (leadtime_factor ˆ Order_backlog/Capacity; uti-
lization_factor ˆ min[leadtime_factor,1] ). As seen in the ® gure 7, the manufacturing

Figure 7. Capacity-based supply chain structure.

 Dynamic modelling of surge eVect and capacity limitation in supply chains 4529

system concerned in this simulation model consists of a capacity, an inventory and a

supplier. This two-echelon supply chain manufactures multiple products by using
make-to-order or assembly-to-order production policies. Orders accumulate the
backlog depending on volume. Orders for the supplier are made based on sales.
The capacity is the goods in ¯ ow and shipped items are removed from the order
backlog. The ratio between orders backlog and capacity de® nes the average lead time
for order ful® lment. The behaviour of the capacity-based supply chain is similar to
the stock model. Capacity constrains the ability of an echelon to process goods
(® gure 8). Order variety may require setups and thus changeovers consume capacity.
High capacity utilization leads to cost-e ciency. On the other hand, high utilization
makes queue time longer for an order. Cost e ciency and fast delivery are trade-oŒ
performances which cannot be maximized at the same time. Economic reactivity
depends on the cost structure of the product to be manufactured.
From the customer point of view, the diŒerence is that there is lead time. A
customer’ s preference for lead time should be taken into account. Big separate
orders cause problems in guaranteeing order-ful® lment time. By using smaller
order sizes more frequently, the supply chain is capable of reacting to changes
faster. Better responsiveness in terms of demand change is a core capability for
operating in an uncertain environment. This also helps to maintain an e cient
service level and thus can be considered as an enabling factor for prospering from
uncertainty. Smaller production lot sizes may require mix ¯ exibility of production
operations. For this reason, special attention should be paid to developing faster and
cheaper setups, product changeovers, and new product ramp-up. In order to guar-
antee faster lead time for orders or to be prepared for a number of setups, a certain
amount of slack capacity may be required to hedge the uncertainty.
Traditionally, unused capacity has been understood to be a synonym for non-
productive capacity. This thinking is justi® ed by traditional cost accounting: the
better the utilization, the cheaper the manufacturing unit costs per product.
However, when the capability of buŒering and dynamics between supply and
demand is added into the analysis, the utilization’ s eŒect on lead time and pro® t-

Figure 8. Echelon in supply chain and trade-oŒbetween order backlog and lead time.
4530 P. T. Helo

ability cannot be denied. In such a case, where delivery performance is an important

competitive factor, the traditional unit cost minimization policy will not be a sensible
solution. Worse utilization can mean better delivery and increased sales or revenues.
The utilization issue is connected to the capability to adjust capacity. Some
researchers have described this situation as expansion ¯ exibility (Chen et al. 1992)
or ¯ exibility of capacity (Herna ndez and Vollmer 1998). In practice, both of these
measures refer to the ability to easily add capability and capacity in a production
system. The ¯ exibility of capacity is the ability to change load capacity and operates
on a master production schedule level and thus includes manpower and machinery.
Herna ndez and Vollmer (1998) analysed the eŒect of capacity ¯ exibility on manu-
facturing throughput. They conclude that the capability to adjust the capacity eco-
nomically has a great eŒect on throughput and is a strongly recommended method to
produce agility. In their paper, a very ® rst attempt to quantify the concept of agility
was made.
Capacity utilization has an unambiguous connection to production costs, lead
time and the capability to respond in changes. The use of buŒering inventories is
more di cult today because of greater product variety and fast technological
changes. Typically, component prices decrease several per cent every year; new
multi-functional components replace the old ones. Having physical inventory
could present a risk since the proportion of materials in total cost structure is
typically remarkable. The ability to respond rapidly cannot be achieved in a cost-
e cient way by using large stocks. For this reason, hedging against market changes
by using ¯ exible capacity should be considered. Practically, this means that the
company should have enough free capacity in terms of capital investment and
labour.

6. Concluding remarks
We have analysed three models related to the agility of a supply chain. First, we
discussed the importance of ordering policies by using the Forrester eŒect as an
example. We then took load variation into consideration by modelling the
Burbidge eŒect. Finally, the capacity-based supply chain was introduced. We
concluded, from three system dynamics based on simulation models, that capacity
utilization is an important factor, which can be used as a substitute for inventory.
Flexibility of capacity is an important enabling factor to cut demand peaks. The
second constraining factor is the response from suppliers, which is also a function of
capacity utilization and transportation delays. From this we can conclude that all
idle capacity is not non-productive: hedged capacity may pro® t from better delivery
capability.
At diŒerent stages of the supply chain, diŒerent amounts of ¯ exibility are needed
to accomplish the desired agility. Also other enabling factors diŒer: low utilizations
are preferred when demand is close to the ® nal customer as value-addition is
typically highest at this stage. For instance in electronics manufacturing, typically,
the last production phases include parameterization of a product, software
installations and ® nal assembly. The preceding production stages, such as printed
circuit board manufacturing, are more capital-intensive processes and thus require
better utilization for cost-eŒective performance. These parts are essential to the ® nal
product in terms of lead time, but are purchased on a cost-leadership basis. Cheaper
components are manufactured and purchased in greater lot sizes. This is done in
order to minimize the ® xed costs related to setups and transportation batches.
 Dynamic modelling of surge eVect and capacity limitation in supply chains 4531

Capacity and cost structure are not necessarily considered in supply chain optimiza-
tion. However, the brief simulation analyses presented in this paper suggest such
considerations that would be an important enabling factor for agile manufacturing.
The utilization level of capacity has a direct in¯ uence on average lead time. The
simulation analyses of this paper showed that costly ¯ uctuations in load level could
be avoided by controlling the whole supply chain instead of a single local echelon
(Forrester eŒect, Burbidge eŒect). Managerial implications include synchronization
of supply chain, lead time reduction, and ordering policies. Dynamic eŒects cannot
be avoided in production, but a proper understanding of capacity planning and
control in supply chains helps a company to appreciate customer requirements for
change and to prosper from uncertainty.

Appendix A: Source for `Demand magni® cation’

Appendix B: Source for `Surge eŒect’

4532 P. T. Helo

Appendix C: Source for `Capacity based supply chain’

References
A NDERSON, E . G . J R , F INE, C . H . and P ARKER, G . G ., 1996, Upstream volatility in supply
chain: the machine tool industry as a case study. Working papers, MIT Sloan School of
Management, Cambridge, MA.
BAKER, J ., 1996, Agility and ¯ exibility: What’s the diŒerence? Cran® eld School of
Management Working Paper, SWP 5/96. Cran® eld University, Cran® eld.
BURBIDGE, J . L ., 1996, Period Batch Control. Oxford Series on Advanced Manufacturing 12.
(Oxford: Clarendon Press).
BURBIDGE, J . L ., 1961, The `New Approach’ to Production. The Production Engineer, 14, 769±
784.
C HEN, I . J ., C ALATONE, R . J . and C HUNG, C .-H ., 1992, The marketing± manufacturing inter-
face and manufacturing ¯ exibility. Omega, 20, 431± 443.
C OYLE, R . G ., 1996, System Dynamics ModellingÐ a Practical Approach (London: Chapman
& Hall).
D A SILVEIRA, G ., 1998, A framework for the management of product variety. International
Journal of Operations & Production Management , 18, 271± 285.
D AVIS, A . and O ’ D ONNELL, J ., 1997, Modelling complex problems: system dynamics and
performance measurement. Management Accounting Today, May, 18± 20.
D UGAY, C . R ., L ANDRY, S. and P ASIN, F ., 1997, From mass production to ¯ exible/agile
production. International Journal of Operations & Production Management, 17, 1183±
1195.
D EL VECCHIO, A . and T OWILL, D . R ., 1990, Conceptual modelling of industrial production
distribution system via standard form. Mathematical and Computer Modelling, 14,
1029± 1034.
 Dynamic modelling of surge eVect and capacity limitation in supply chains 4533

E VANS, G . N . and N AIM, M . M ., 1994, The dynamics of capacity constrained supply chains.
Proceedings of International System Dynamics Conference, Stirling, pp. 28± 35.
F ORRESTER , J . W ., 1958, Industrial DynamicsÐ a major breakthrough for decision makers.
Harvard Business Review, 36, 37-66.
F REY, D . N ., 1994, The new dynamism: part 2. Interfaces, 24, 105± 108.
G UNASEKARAN, A ., 1998, Agile manufacturing: enablers and an implementation framework.
International Journal of Production Research, 36, 1223± 1247.
H ERNAí NDEZ , R . and VOLLMER , L ., 1998, EŒects of ¯ exible capacities on logistic objectives. In
M. Tseng, Proceedings of The 3rd Annual International Conference on Industrial
Engineering Theories, Applications and Practice, December 28± 31, Hong Kong.
H OLMSTROï M, J . and H AMERI, A ., 1999, The dynamics of consumer responseÐ a quest for the
attractors of supply chain demand. International Journal of Operations & Production
Management , 19, 993± 1009.
K IDD, P . T ., 1998, Agile ManufacturingÐ Forging New Frontiers (Wokingham: Addison-
Wesley).
L EE, H . L . and T ANG, C ., 1997, Modelling the cost and bene® ts of delayed product diŒer-
entiation. Management Science, 43, 40-53.
L EE, H . L ., P ADMANABHAN, V. and W HANG, S., 1997, The bullwhip eŒect in supply chains.
Sloan Management Review, 38, 93± 102.
M ASON-J ONES, R . and T OWILL, D . R ., 1999, total cycle time compression and the agile supply
chain. International Journal of Production Economics, 62, 61± 73.
M ORECROFT , J . D . W ., 1992, Executive knowledge, models and learning. European Journal of
Operations Research, 59, 9± 28.
P ETERSON, S., 1992, Software for model-building and simulation: an illustration of design
philosophy. European Journal of Operational Research, 59, 197± 202.
SENGE, P . M ., 1991, The Fifth Discipline: The Art and Practice of the Learning Organization
(London: Century Business).
T OWILL, D . R ., 1997, FORRIDGEÐ Principles of good practise in material ¯ ow. Production
Planning & Control, 8, 622± 632.
T OWILL, D . R ., 1991, Supply chain dynamics. International Journal of Computer Integrated
Manufacturing, 4, 197± 208.
T OWILL, D ., 1999, Simplicity wins twelve rules for designing eŒective supply chains. Control,
March 9± 13.
VAN A CKERE, A ., W ARREN , K . and L ARSEN, E ., 1997, Maintaining service quality under
pressure from investors: a systems dynamics model as a hands-on learning tool.
European Management Journal , 15, 128± 137.
VOKURKA, R . J . and F LIEDNER, G ., 1998, The journey toward agility. Industrial Management
& Data Systems, 98, 165± 171.
W ILDING, R ., 1998, Chaos theory: implications for supply chain management. International
Journal of Logistics Management, 9, 43± 56.
Y OUSSEF, M . A., 1992, Agile manufacturing: a necessary condition for competing in. IIE
Solutions, 24, 18± 21.