Why is the supply chain complex?

Why is the supply chain complex?

Supply chain complexity is caused by a variety of factors often the result of rising customer expectations for faster lead times, expanded products and services, and tailored experiences.

What is complex supply chains?

Supply chain complexity is characterised by copiousness, interdependency, variability, variety and uncertainty. These complexity characteristics are interrelated. For example, a high level of variety may lead to variability or high density. Similarly, diversity may cause uncertainty.

Is supply chain a complex system?

In order to alleviate this problem and improve supply chain performance, it is necessary to model it, taking into consideration its characteristics, which make it a complex system.

What does a long supply chain mean?

Long supply chain legs consist of cross-continent or international suppliers. To capture price benefits, minimums are often higher in the form of truck or container load. Lead times are longer and many additional costs such as landed costs, customs duties, and freight forwarder charges must be considered.

Which are some drivers of complexity in the supply chain?

Supply chain complexity drivers (e.g., number/variety of suppliers, number/variety of customers, number/variety of interactions, conflicting policies, demand amplification, differing/conflicting/non-synchronized decisions and actions, incompatible IT systems) play a significant and varying role in dealing with …

What is product complexity?

Product complexity can be e.g. the number of products, the number of components they consist of or raw materials used. Structure complexity can be the number of factories, markets, warehouses or suppliers. If poorly managed, complexity leads to increased costs and decreased customer value proposition.

How do you manage complex supply chains?

Solutions to managing a complex supply chain range across: 1) avoidance; 2) relationship collaboration; 3) information technology; 4) flexible workforces; 5) supplier collaboration; 6) access to leadership: and 7) supplier/customer understanding.

What is the supply chain of a company?

A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the final buyer. Companies develop supply chains so they can reduce their costs and remain competitive in the business landscape.

What is the difference between a long and a short supply chain?

Short supply chains involve as few intermediaries as possible, connecting local suppliers with local consumers more directly compared to conventional (longer) supply chains.

How do you define supply chain?

In its simplest form a supply chain is the activities required by the organisation to deliver goods or services to the consumer. A supply chain is a focus on the core activities within our organisation required to convert raw materials or component parts through to finished products or services.

What is the relationship of supply chain and supply chain management?

Supply chain management refers to the activities that create finished goods from raw materials and deliver them to the customer. SCM also focuses on improving supply chain processes, which can benefit both customers and business partners.

What is supply chain complexity in supply chain management?

Supply chain complexity is therefore a system with a broad range of variations. A typical example would be a globally operating corporation with multiple production sites, all of which are in contact with numerous distribution centers worldwide, supplying thousands of end points.

What is a supply chain?

A supply chain is a connected system of organizations, activities, information and resources designed to source, produce and move goods from origination to a final destination—typically from a supplier to an end customer. Modern supply chains are often very complex, spanning multiple countries and involving many steps.

What are the challenges of a long supply chain?

Challenges arise not only because of supply chain length (i.e., geographical distances involved) but because of depth (i.e., the number of tiers involved) as well. As a result, Christian Lanng ( @christianlanng ), CEO of Tradeshift, cautions, “Enterprises need to increase visibility into their own operations and those of their suppliers.

What are the players in the supply chain?

The supply chain is a complex system. The players are complemented by external factors like the market, customers and suppliers. Only by aligning these elements in the right way, will the product take a profitable course from producer to customer. Easier said than done, since the particular processes involved typically pursue contrary goals.