SCC_Complexity

SCComplexity – Marie Curie

The purpose of this research project is to investigate new business and supply chain models in order to help companies manage complex links for lower costs, better service, reduced energy consumption, lesser emission of pollutants, and to attain sustainable competitive advantage.

SCs become more challenging to manage as product life cycles shorten, product variety and customization levels increase, customers become more demanding, and SC partners and customers become more geographically dispersed. These challenges lead to an increase in number and variety of interactions between the elements of products, processes and relationships that make up a supply chain and the uncertainty and constraints surrounding these elements. This numerousness and variety of elements, inter-relationships between them, and constraints, and uncertainties surrounding them is referred to as Supply Chain Complexity (SCC) (Manuj and Sahin, 2011).

The state-of-art research on SCC has accomplished several significant milestones, albeit with considerable limitations. A review of literature reveals three major gaps:

1.    A comprehensive theoretical model of antecedents and outcomes of SCC is lacking (Schuh et al., 2008).

2.    There is limited research on how to define and measure the complexity of a SC system (Hofer and Knemeyer,
       2009)

3.    It is important to address SCC from practical viewpoint.

 
SCC is not only an important theoretical area (as explained earlier) but also a critical managerial issue as evidenced by the facts below.

·       Companies that are able to manage SCC make up to 73 % more profit (Deloitte, 2003).

·       The way companies handle SCC has effects on SC performance such as delivery times (Perona and Miragliotta,
        2004) and operational costs (Wu et al., 2007).

·       A reduction in complexity is linked to improved performance outcomes such as lower transaction costs and
        increased supplier responsiveness (Choi and Krause, 2006).

·       SCC has repercussions for the environment. High SCC increases the energy needs and environmental pollution
        as transportation and other SC operations are significant source of carbon emissions.

Managing SCC becomes even more challenging because of the following reasons:

·       Companies need to learn to rapidly manage an increased level of complexity to remain competitive in today’s
        environment (Lewis and Sheinfeld, 2006).

·       It is expected that SCC will continue to increase significantly over the next decade (Capgemini, 2008).

·       Most practitioners value the complexity in their SCs as high or too high (Meyer, 2007).

·       As a response to SCC challenge, companies are re-examining their SC networks more often, but they′re not
        satisfied with the tools they use to do so (SC Quarterly Staff, 2012 issue).

·       There is a significant gap between what companies perceive as important complexity-management practices
        and their ability to identify and track metrics for those practices. (Lewis and Sheinfeld, 2006).

 

This research addresses the limitations of the state-of-art research through multi-disciplinary research and multiple methods.
The first research objective relates to the lack of a comprehensive theoretical model of SCC.
The second research objective relates to the lack of measures for SCC. Most rigorous scale development and purification methods suggested in the literature will be used along with Structural Equation Modeling (SEM). This will lead to the development of a measurement model for SCC which will subsequently be used for testing a theoretical model of SCC.
The third research objective relates to the limited theoretical generalizability or normative guidance for SC managers. The next research phase will be to develop a theoretical model of SCC and to test the model using survey research and SEM.