A Methods For Measurment of Flexibility in Logistics systems

Cost and quality have always been the major competitive advantages during many years. Cost efficiency was the major driving force behind the Henry Ford’s mass production paradigm. By producing in large amount, cost per unit decreases and help the firm to take advantages of lower cost of finished product as a strategic imperative. Through the efforts of Edwards Deming and Joseph M. Juran in Japan, quality became the next strategic imperative. Followed this strategy, a great number of firms focused their effort on quality improvement as a mean of reducing cost and improving the costumer satisfaction. As a result of increased global competition in the 1970s, responsiveness emerged as the third strategic imperative. Buyers demanded more customization, more variety and shorter lead time. Manufacturers found they could no longer maintain the large volumes of production due to higher levels of change and uncertainty in customer demands (Leslie et al., 2003). In order to cope with market instability and uncertainty, companies now look beyond cost and quality advantage. Speed, quality and flexibility are being emphasized as means of responding to the unique needs of customers and markets. (Yusuf et al., 2004) Several authors have pointed out to this change in competitive advantages in their researches. Shin et al. (2000) and Krause et al. (2001) believe that competitive priorities are cost, quality, delivery and flexibility. Leslie et al. (2003) points out that one strategy for gaining and keeping a competitive advantage in a dynamic environment is to create a flexible organization. Gunasekaran et al. (2004) say that flexibility can be rightly regarded as a critical factor by which supply chains competes.