A Method for Analysing Operational Complexity in Supply Chains

Wu, Yue R., Huaccho Huatuco, Luisa, Frizelle, Gerry and Smart, Janet (2013) A Method for Analysing Operational Complexity in Supply Chains. Journal of the Operational Research Society, 64 (5). pp. 654-667.

Abstract

This paper proposes a method for analysing the operational complexity in supply chains by using an entropic measure based on information theory. The proposed approach estimates the operational complexity at each stage of the supply chain and analyses the changes between stages. In this paper a stage is identified by the exchange of data and/or material. Through analysis the method identifies the stages where the operational complexity is both generated and propagated (exported, imported, generated or absorbed). Central to the method is the identification of a reference point within the supply chain. This is where the operational complexity is at a local minimum along the data transfer stages. Such a point can be thought of as a ‘sink’ for turbulence generated in the supply chain. Where it exists, it has the merit of stabilising the supply chain by attenuating uncertainty. However, the location of the reference point is also a matter of choice. If the preferred location is other than the current one, this is a trigger for management action. The analysis can help decide appropriate remedial action. More generally, the approach can assist logistics management by highlighting problem areas. An industrial application is presented to demonstrate the applicability of the method.

Item Type: Article
Keywords: Operational complexity; entropy; reference point; manufacturing systems; information theory; supply chain
Subject(s): Complexity
Operations management
Project management
Centre: CABDyN Complexity Centre
Date Deposited: 02 Aug 2012 13:36
Last Modified: 14 Jul 2017 11:09
Funders: Not applicable
URI: http://eureka.sbs.ox.ac.uk/id/eprint/3960

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