Complexity in the supply chain

It is well understood that supply chains are complex. However less clear is just what complexity means in this context. This paper reports on the outcome of five years of research on complexity in supply chains. One of the outputs from the research has been the development of a metric to measure one form of complexity within the chain, called operational complexity. Three elements are identified. The first two are referred to as structural complexity. They cover how products are allocated to resources in the chain and how the chain is controlled. The third element is how the chain performs. In particular does it behave in a predictable way. A model has been developed along with a metric to measure complexity. The ideas were applied to two distinct types of chain. The first was a typical make to stock environment. Here the aim was to reduce inventory in the chain. Reducing operational complexity was seen as a way of doing this. The second was a design to order environment. The findings in each case helped the chains both to understand better the mechanisms involved and to bring about improvements. © 2004 IEEE