Slide 1Chapter 8: Sources of Supply Chain ComplexityChapter 8: Sources of Supply Chain ComplexityChapter 8: Sources of Supply Chain ComplexityChapter 8: Sources of Supply Chain ComplexityChapter 8: Sources of Supply Chain ComplexityChapter 8: Sources of Supply Chain ComplexityChapter 8: Sources of Supply Chain ComplexityChapter 8: Mastering ComplexityBoeing 757 Global Supply ChainSlide 11Slide 12Business Administration 331Supply Chain ManagementChapter 8Dr. John E. BellAssociate Professor of Supply Chain Management 343 Stokely Management [email protected] 8: Sources of Supply Chain Complexity 1. Network complexity•The more nodes and links the more complex •Outsourcing has increased •Visibility of 2nd/3rd tier is lackingChapter 8: Sources of Supply Chain Complexity 2. Process complexity•Supply chains have innumerable processes•Many were created haphazardly•Extends lead-times and variabilityChapter 8: Sources of Supply Chain Complexity 3. Range Complexity•The number of products and variety has a tendency to grow•As more variants are added, the demand/variant decreases•Decreases forecasting accuracy•Increases variable and supply chain costsChapter 8: Sources of Supply Chain Complexity 4. Product complexity•Supply chain begins on drawing board•Complexity increases with the number of unique parts and componentsChapter 8: Sources of Supply Chain Complexity 5. Customer complexity•Too many non-standard or customized service options for customers•What are the cost implications?•Limited information about the actual costs of unique service offerings•Will customers pay for added value?Chapter 8: Sources of Supply Chain Complexity 6. Supplier complexity•Too many suppliers adds cost•Many relationships to manage•Increased transaction costs•Too few suppliers is also dangerous•Consider using a “lead” supplier to manage other supply relationshipsChapter 8: Sources of Supply Chain Complexity 7. Organizational complexity•Increased by mergers and globalization•Vertical structures increase “silos”8. Information complexity•Increased by other seven complexities•Difficulty moving data and lack of visibility can create bullwhip effectChapter 8: Mastering ComplexityReducing complexity is a supply chain priority1. Understand sources of complexity2. Do a Pareto analysis of sources3. Find the handful of sources adding the most complexity4. Which complexity elements are non-value adding?5. Seek to eliminate the non-value added complexityBoeing 757 Global Supply Chain1011Business Administration 331Supply Chain ManagementChapters 8Dr. John E. BellAssociate Professor of Supply Chain Management 343 Stokely Management
View Full Document
Unlocking...