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The Jacques Adriaansen feature: How to navigate the maze of supply chain process complexity

Jacques Adriaansen, ‎co-founder of Every Angle, argues that the route to supply chain success is to reduce process complexity ~
Have you ever found yourself stuck in the middle of a maze, struggling to find your way towards the exit? It can be a frustrating feeling that many involved in supply chain processes will be able to relate to. And yet, whereas a maze is designed with a level of complexity that will test your grey matter, it’s well worth remembering that supply chains are meant to be a far less taxing consideration. After all, at their essence, supply chain processes are fairly simple. Think about it. A client places an order, the product is purchased or produced and brought to the distribution centre, and from there it is despatched to the customer. At the same time the financial department completes the invoicing process. What’s so complicated about that?

The truth is that there are very few companies for whom the processes are actually that simple, and it’s an area where complexity is, unfortunately, rife. A typical organisation will have not one, but multiple distribution centres, will work with subcontractors and first and second tier suppliers, not to mention additional collaboration with logistics service providers. Add to this the standard fluctuations in the sales of products and the various changes in the market, and the complexity of processes very rapidly goes off the chart.

The fact of the matter is that there are two certainties in the supply chain world: “Processes are complex”, and “Uncertainty is part of the system.” What is notable is that many companies fail to consider why processes are so complicated. With this in mind, it’s perhaps no surprise that they are so rarely in a position to do anything about it. To reduce process complexity or limit its effects, one must consider both the organisation of processes and IT support.

To achieve this, it’s worth asking what the process complexity challenges are that need to be faced. One of the biggest is the notion of “silo behaviour”. From an organisational viewpoint, the fact that employees are not inclined to look beyond their own interests and responsibilities can be a real challenge. Since the early 1970s entire forests have been felled to produce the paper for reports on the need to eradicate “functional silos”. Yet the silos are still there.

As a result, it continues to be difficult to get purchasing, production and sales aligned, because the presence of these silos means that the ability to be able to carry out “their” way of working is seen almost as a pre-condition of completing a task. Increasingly, staff are only able to carry out the desired analysis if they are able to do so easily and in their own jargon, without having to immerse themselves in the entire supply chain process. Clearly, the key to successfully addressing this challenge is to simplify processes from the user’s perspective and remove complexity.

This can be achieved by simplifying processes, ensuring that there are fewer links in the chain, fewer activities per link and/or fewer players per activity. If simplification is impossible, all that is left is the option to “buffer” to absorb the uncertainty. For example, you might stock in a carefully considered safety inventory of products, which have a major impact on the production process or on customer assessments, or you could maintain some overcapacity to be able to respond to unexpected demand. Internal coordination will also help, and deploying information systems plays an important role in this.

Let’s not forget that supply chain staff are under severe stress because of the relatively short response and decision time frames and the overall hustle and bustle. Neuroscientist Andy Habermacher makes it clear that people who are highly stressed are not good at coping with complexity. This makes it virtually impossible to take well-considered decisions while under pressure. At the same time we are expected to take the right decisions at any given time.

Ultimately, these decisions will not only determine how successful the supply chain is, but also the performance of the organisation as a whole. What this means is that organisations cannot keep ignoring this effect of “complexity compounded by stress” if they are to succeed. By placing an increased emphasis on reducing or cleverly hiding process complexity, organisations can prevent themselves from losing control entirely and from becoming trapped in the maze of complexity forever!

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