The impact of agility on the performance of a supply chain: a simulation study

The aim of this work is to analyze the performance of different supply chain configurations, with a particular attention to the impact of agility of supply chain players on the performance level. A simulation model is developed to reproduce a simple supply chain; the agile strategy is reproduced of supply chain players is reproduced by appropriately setting the simulation parameters. Overall, 18 supply chain configurations are examined, resulting from the combination of the following design parameters: (i) number of supply chain echelons; (ii) number of products managed by the supply chain; (iii) degree of flexibility of supply chain echelons. The agile supply chain is identified as the supply chain that manages a high number of products and whose echelons are characterized by a high degree of flexibility. The performance investigated for the supply chain configurations considered include some economical parameters (such as cost of holding stocks and stock-out costs), besides the supply chain lead time and the bullwhip effect. Results of the study suggest a possible impact of agility on reducing the bullwhip effect in the supply chain, and, under some circumstances, on reducing the costs of stock-out. Conversely, it emerges from the study that supply chain lead time, stock-out costs and costs of holding stocks do not significantly depend on the agility of the supply chain. The above results provide some guidelines concerning the performance achievable by adopting agile strategies in the supply chain.