Complexity Management Overcoming Complexity: New Study On Supply Chain Management
Complex supply chains do not only bear risks for contractors – they also offer a great potential for differentiation. According to a recent study, companies still do not exploit the full potential that complexity management offers.
Munich/Germany – Only one in five companies uses adequate methods to detect changes on the supply and distribution markets, says a new market study by Munich's university of applied sciences supported by the German Association for Material Sciences and Wassermann. The study, carried out by a team of analysts lead by Professor André Krischke, used focus interviews with 40 logistic and supply chain companies to determine what methods of supply chain complexity management firms should use to gain market growths.
According to Prof. Krischke, most companies do expect supply chain processes to get increasingly complex. Nevertheless, the dynamics of this complexity are especially felt by Tier-1- and Tier-2 supplier, Krischke says. This increasing complexity can also have different reasons: the study found out that traders and OEM companies have to deal with increasingly interwoven global distribution markets, Tier-1 and Tier-2 suppliers have to tackle increasingly complex production processes.
Room for Improvement:
According to the study, managers agree that mastering complexity is more important than overcoming or reducing it. A majority of participees sees complex supply chains as a chance to gain advantages in the global competition.
Complexity management, nevertheless, often boils down to modular process designs, as the analysts found out. Therefore, Krischke still sees room for improvement: "Companies currently do not use all methods to reduce, overcome or master complexity within the supply chain. Dynamic approaches like trend management, scenario planning or simulations are only used by one fifth of the company's."
Günter F. Baumann, CEO of Wassermann, added: "The results show that supply chain managers regard complexity as a chance. Still the design of dynamic systems offers great possibilities for optimizing."