Understanding Supply Chain Complexity: an Approach Integrating Performance Measurement and System Dynamics

Supply chains are complex adaptive systems since they are made up of many and different components interconnected by a high number of non linear relationships. Nowadays, several circumstances contribute to raise the level of supply chain complexity, such as short product lifecycles and geographically distributed manufacturing and logistics systems. In this context, traditional management approaches based on a mechanistic view of supply chains as "simple systems in simple environments" are clearly inadequate. However, before developing new models, a deep understanding of what drives supply chain complexity and of its consequences on organizational behavior is needed. The present work proposes an approach for analyzing both causes and effects of supply chain complexity by integrating performance measurement and System Dynamics modeling and simulation methodology. The approach is applied to two case studies. The first case is taken from the automotive industry, while the second one is related to the apparel sector. In addition, a preliminary study on how performance measurement may help deal with service supply chain complexity is detailed by considering the case for hospitals.