Complexity and the supply chain

5 important questions on Complexity and the supply chain

What are the sources of supply chain complexity?

  1. Network complexity
  2. Process complexity
  3. Range complexity
  4. Product complexity
  5. Customer complexity
  6. Supplier complexity
  7. Organisational complexity
  8. Information complexity

Solutions to SC complexities

1. Network Complexity
SCRM (including cyber security)
• Increased visibility
• Increased collaboration
• Alternative suppliers (nearshoring, onshoring)
• Inventory levels and positioning (safety stock)
• Monitor logistics options and costs

2.

How can product design impact supply chain complexity?

  • Time-to-market and time-to-volume
  • Added complexity through lack of commonality
  • Increased replenishment lead-times
  • Supply chain vulnerability
  • After-sales support
  • Late stage customisation
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Describe the five-stage process to mastering complexity

  1. Understand the sources of complexity
  2. Which elements of complexity add value and which do not?
  3. Seek to eliminate the non-value adding complexity
  4. Minimise the cost of the value-adding complexity
  5. Continuously monitor and review the cost/benefit of complexity

How should complexity management be balanced?

Complexity management in the supply chain has to be a careful balance between over-simplification on the one hand and a focus on cost and efficiency on the other

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