Ch. 9 Complexity and the Supply Chain

Question 1

Explain the butterfly effect.

Answer 1

A small event can lead to large consequences somewhere else.

Question 2

What is meant by “complexity” in supply chains?

Answer 2

A condition of interconnectedness and interdependency across networks.

Question 3

What are the 8 types of complexity?

Answer 3

1. network
2. process
3. range
4. product
5. customer
6. supplier
7. organizational
8. information

Question 4

What is the largest source of supply chain complexity?

Answer 4

Product design. It accounts for roughly 80% of the through-life costs.

Question 5

In what ways can product design decisions impact supply chain complexity?

Answer 5

1. time-to-market or time-to-volume
2. added complexity through lack of commonality
3. increased replenishment lead times (suppliers)
4. supply chain vulnerability (unreliable suppliers)
5. after-sales support
6. late-stage customization

Question 6

What are the 2 ongoing activities to do to reduce complexity?

Answer 6

1. network simplification

2. process re-engineering

Question 7

What is the aim of managing complexity?

Answer 7

Reducing/eliminating activities that don’t add value or protect against supply chain risk.