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Describes a paper company that is unable to compete on cost as a result of the installation of three very efficient paper machines by competitors. Prices for its products are falling by the day and the company is making a loss. In the face of such competition, management feels that the only course of action is to improve "flexibility" and/or take advantage of the flexibility they already have. The problem is that no one knows quite what flexibility is, let alone how to implement an improvement plan. Describes four improvement paths, each of which might be considered to improve "flexibility." The conflicts between these plans are also considered by the company. In addition, the sales force gives a view of the flexibility requirements of the company from the customer''s viewpoint.; Examines the issue of operational flexibility. The three generic types of flexibility: range, mobility, and uniformity of performance are examined in detail. Students must match and distinguish the internal capability of being flexible in different ways, to the competitive requirement for different types of flexibility from the customer.