Complexity Management

Complexity Management

A Supply Chain that goes from the start to the end of a business model will have numerous links and chains. All these links are individual entities that require micromanagement at their levels. Their combined sum forms the Supply Chain network, and they must work in tandem to be effective.

However, having so many links leads to intricate and complex management problems that need to be addressed effectively. Supply Chains are not a single highway from start to finish, but an elaborate freerunning course. Each part of the network runs at distinct paces, has different functions, and requires varying degrees of attention.

Supply Chains require Complexity Management since it is impossible to establish a global supply chain without a moderate degree of intricacy. This vast and expansive network is designed as such by taking many factors into account. In individual operations like Manufacturing, Production, etc., such a high degree of freedom is essential for controlling the process. A decentralized system is more natural to micromanage and is more efficient as a single unit. And supply chains that span across the globe contain numerous such groups.

Due to this inherent complexity, overseeing it becomes an essential part of Supply Chain Management. Especially nowadays, when many coexisting factors of a company are outsourced, Complexity management on a global scale becomes even more relevant. Complexities must be minimized and managed at every turn to streamline decision making, process planning, and overall working of the network.

Procedures such as SKU optimization and market presentations can improve the efficiency of a supply chain by removing unnecessary complexity. For example, using SKU optimization, products can be analyzed and evaluated in terms of their supply, production, and demand to eliminate unnecessary products. Data Analytics, as well as Market studies, can be used for this purpose.

Regulatory filings are also a part of Complexity Management. Ensuring that the company complies with the existing regulations is a significant part of avoiding complexities in the network. Any deviation will cost the enterprise money, labour, and increase downtime due to the wastage. This will only lead to further complications downstream, disrupting the budget as well as schedules.

Complexity is inherently problematic, as it results in a large margin of error. A process that has more number of complex sub-processes involved in it disrupts quickly. Especially in supply chains, one hitch in the middle of the network can lead to severe repercussions downstream. To mitigate such situations, it is imperative to reduce complexity when possible and adequately manage the remaining links for the best results.