Executive Briefings

Meeting the Challenge of Complexity

Complexity can be a headache for supply-chain managers, says Sanjiv Karani, head of global product marketing with Cincom Systems. But it can also be a good thing. He explains why.

Complexity in supply-chain management rears its head in three distinct ways, says Karani: in the sheer number and variety of components, systems and people involved; in the interrelationships among them; and in the rate at which the picture is constantly changing. "The more components you add to the mix," he says, "the more you add complexity."

Complexity is not entirely a negative concept. "Good complexity improves performance," says Karani. "If things were simple, we'd all be making minimum wage, and everybody would be able to copy everybody else."

What's unique about a company or its product is what ultimately creates value for customers. In that respect, complexity can be a good thing. Bad complexity, by contrast, "destroys value, adds cost and harms the customer experience," says Karani. The trick for supply chain managers lies in knowing the difference between the two.

Karani lays out what he calls "the six P's" of complexity: periphery, covering regulations, terrorism and other issues beyond a company's control; planning, involving a company's unique identity and what it sells; people, focusing on human behavior and interactions; processes, arising from the orchestration and execution of core business processes; projects, aimed at such goals as delivering product on time and on budget; and products, raising basic questions about how to respond to changing customer demand.

Karani speaks also of the "total intelligence concept," which he defines as the ability to master the end-to-end supply chain, drawing on both manufacturing and general business data at all levels. Total intelligence embraces "everything I know about my market, competition, and what I need to do at the plant level to optimize [operations]. It's the best of both worlds."

Companies struggle with the question of which aspect of business to address first: people, process or technology. "At the heart of any change management is all three," says Karani. "It's the fusion of all those things."

To view the video in its entirety, click here


Keywords: supply chain, supply chain management, supply chain planning, inventory management, customer relationship management, logistics management, supply chain systems, supply chain risk management

Complexity in supply-chain management rears its head in three distinct ways, says Karani: in the sheer number and variety of components, systems and people involved; in the interrelationships among them; and in the rate at which the picture is constantly changing. "The more components you add to the mix," he says, "the more you add complexity."

Complexity is not entirely a negative concept. "Good complexity improves performance," says Karani. "If things were simple, we'd all be making minimum wage, and everybody would be able to copy everybody else."

What's unique about a company or its product is what ultimately creates value for customers. In that respect, complexity can be a good thing. Bad complexity, by contrast, "destroys value, adds cost and harms the customer experience," says Karani. The trick for supply chain managers lies in knowing the difference between the two.

Karani lays out what he calls "the six P's" of complexity: periphery, covering regulations, terrorism and other issues beyond a company's control; planning, involving a company's unique identity and what it sells; people, focusing on human behavior and interactions; processes, arising from the orchestration and execution of core business processes; projects, aimed at such goals as delivering product on time and on budget; and products, raising basic questions about how to respond to changing customer demand.

Karani speaks also of the "total intelligence concept," which he defines as the ability to master the end-to-end supply chain, drawing on both manufacturing and general business data at all levels. Total intelligence embraces "everything I know about my market, competition, and what I need to do at the plant level to optimize [operations]. It's the best of both worlds."

Companies struggle with the question of which aspect of business to address first: people, process or technology. "At the heart of any change management is all three," says Karani. "It's the fusion of all those things."

To view the video in its entirety, click here


Keywords: supply chain, supply chain management, supply chain planning, inventory management, customer relationship management, logistics management, supply chain systems, supply chain risk management