Study of complexity in supply chains

Abstract

The study is based on the concept proposed in the book Clockspeed by Charles Fine. It aims to create a system dynamics model to illustrate the interplay between different factors and how it can be used as a tool for decision making. The study does not establish the empirical relationship between models and defines parameters at a high level in a generic way that is not specific to any industry. The book Clockspeed suggests that apart from looking at the product development cycle and manufacturing cycle in an integrated way as suggested by Concurrent engineering, the supply chain should also be included to provide a comprehensive picture. It proposes a model where the product chain, process chain and supply chain are taken together in a company strategy called 3 dimensional concurrent engineering or 3 DCE. System dynamics was chosen for modelling because it provides many advantages such as allowing the visualization of the causality between different parameters and ability to abstract parameters at a higher level which can then be investigated by modelling deeper levels where industry specific and company specific parameters can be analyzed. A system dynamics model can be created by a 4 step process involving causal loop diagrams, stock and flow diagrams, equations and dynamic simulation results. The study does the first 2 steps and then uses secondary data for the 3rd step. The 4th step is then completed. The report then describes the construction of the 3 chains in the model, namely the product, process and supply chain. Finally it attempts to show how the interplay between the factors of the different chains can be used for decision making by managers.