Supply Chain Dynamics—The Change Engineering Challenge of the Mid 1990s

Abstract

Much has been written concerning the supply chain demand amplification problem, best described by the ‘law of industrial dynamics’. Broadly speaking, if a supply chain can find a way to fluctuate, it will. The paper defines supply chains and reviews their current state of development. By way of a simulation example, the importance of good, shared, information flow is highlighted, as are several other strategies that lie more within the control of individual businesses. Good supply chain operation requires adequate design, led by a product champion committed to systems change. Persuasive evidence to support the product champion is therefore offered. Examples include internally generated demand amplification caused by human schedulers; an industrial supply chain case history; supply chain redesign via simulation; and a review of a proposed effectiveness framework which offers the possibility of integrating both modelling and design phases. The methodologies that are described herein may be universally applied to any industrial or commercial sector in which there is a value-added process. They have found great favour in the automotive industry, which is manifestly an area of endeavour where customer selectivity leads directly to the ‘demand chain’ viewpoint. However, a health care supply chain example also appears in the paper because it contains an important feature which could be duplicated to great advantage in many other applications. This is the opportunity taken to build customer-driven ‘phase advance’ or predictive capability into the system in order to improve the flow of both orders and products.