Complex Industry

Questions from Day 1

1. 2. 3. 4.

5. 6. 7. 8. 9.

Provide an example of a combined good/service. What is servitization? What is effectiveness and efficiency? How are they related? Harley questions

Which are the legislative risks associated with international supply chains? Which are the strategies that help mature supply chain organisations to embed the concept of risk into their strategy? How must supply chain organisations change with the times to ensure ongoing success? What is the holistic view in sustainability? Which trends are identified in the article?

Dr. Elias A. Hadzilias – OCI February 2012

1

SUPPLY CHAIN COMPLEXITY: Dealing with a Dynamic System

Dr. Elias A. Hadzilias – OCI February 2012

2

Complexity definition

An intricately structured and variable system Highly sensitive in its adjustment to the initial conditions or to even minor changes, creating a vast number of development possibilities A large collection of interacting components Difficult to understand or examine due to its design and/or operations A system in process, changing and developing over time

Dr. Elias A. Hadzilias – OCI February 2012

3

Supply Chain Complexity Study

 Conducted by PRTM Management consultants and MIT in 2006.  80 percent of the participating companies believed their supply chains to be highly complex.  Almost 60 percent of the participants also thought that their supply chain had a high infrastructure cost basis.

Dr. Elias A. Hadzilias – OCI February 2012 4

Three main aspects of complexity

Operational complexity Logical complexity Administrative complexity

The article analyses the first 2 aspects.

Dr. Elias A. Hadzilias – OCI February 2012

5

Operational complexity factors

 Diverse logistics with numerous transportation options (sea, land and air), requiring that organisations make daily decisions to remain competitive.

 Unpredictable influences on supply times, such as port strikes, natural disasters,...