Supply chains and complexity.
The world of trade and business has always been volatile and complex to the people experiencing it at that point in time. Throughout my working life I have read articles that talk about business being fast moving and ever more complex – the commentators were writing about their current knowledge.
In the past the complexity in business was recognised, but knowing that tools were not available to comprehensively address it, work-arounds were developed that enabled a reasonable approximation of the situation. And life went on.
To many logistics professionals, the business environment now seems even more complicated. But through IT and communications technology, low cost tools have been developed that enable us to analyse events. Global business complexity is not going to get easier, but now we have the means to hopefully understand it and make a reasoned response.
To help you understand the potential of your supply chains through using modelling and simulation tools, an interactive book titled Beyond Connecting the Dots has just been published. A short overview of the book’s approach can be seen below:
Model your complexity and understand
The tools used in the book come from http://insightmaker.com the free modelling and simulation application. These tools allow you and your team to build an initial model of your supply network based on data generated from the four core elements:
- Nodes – each location that stores or stocks a material item or money
- Variables – factors that can change the physical or financial values at a node
- Flows – transport between nodes
- Links – transfer of data and information between nodes, variables and flows
The challenge of a supply network is that it …”adapts and organises itself without a single entity deliberately managing or controlling it” (Holland 1995). Your supply network is therefore a complex adaptive system; only through applying modelling and simulation tools and techniques will you be able to comprehend what is happening and more importantly what could happen in the future and its possible effects.
The planning role of professional logisticians within a complex adaptive system, is to co-ordinate the internal and external processes to ensure availability of the required items. Undertaking analysis of your supply network, allows you to better understand it, therefore increasing the potential to build collaboration between your business, suppliers and customers and their systems.