Supply Chains: A Manager's Guide

Complexity and Variability

The basic elements of supply chains—the structures, dynamics, and patterns described in the preceding sections—are simple. Yet, as illustrated by the examples in Chapter 1, real-world supply chains are notoriously difficult to manage, and they are liable to catastrophic failure. This contrast between principle and practice invites a crucial question: Where does the difficulty come from? Underneath the many symptoms and their immediate causes, there appear to be two root causes to the difficulty of managing supply chains: complexity and variability. This last section of the chapter takes the measure of each.

The complexity begins with the way the three primary flows relate to one another. In principle, it's simple—orders ...