The supply chain complexity triangle: Uncertainty generation in the supply chain

Abstract

Since the late 1950s it has been recognised that the systems used internally within supply chains can lead to oscillations in demand and inventory as orders pass through the system. The uncertainty generated by these oscillations can result in late deliveries, order cancellations and an increased reliance on inventory to buffer these effects. Despite the best efforts of organisations to stabilise the dynamics generated, industry still experiences a high degree of uncertainty from this source. The “supply chain complexity triangle” describes the interaction of deterministic chaos, parallel interactions and demand amplification. It provides a framework for understanding the generation of uncertainty within supply chains. The implications for supply chain strategy and manufacturing logistics are discussed.