Supply Chains Are Complex … and the Earth is Round.

Hey, some of you might not know the earth is round! It’s only been 70 years since the first pictures of earth were taken from an altitude greater than 100 miles in space (and, up until that time, the non-believers could demand visual proof)! (To be precise, the first pictures of Earth as seen from an altitude above 100 miles was on March 7, 1947. Source: NASA)

But to not know that supply chains are complex, when “global” trade is almost as old as civilization (as purchasing is, of course, the world’s second oldest profession until such time as someone can definitely prove astronomy came first), that’s, well, really unthinkable. But yet, APICS and Michigan State University just gave us yet another report that announced yet again that supply chain leaders are citing “complexity” as the top supply chain challenge. Moreover, they decided to dive into the sources of complexity and found, surprise, surprise that they are:

  • customer accommodation
  • operations globalization
  • supplier (local sourcing) complexity
  • supply chain trends

But there’s nothing new here either. Let’s take ‘em one by one.

The number of variations of a product desired is equal to the number of customers you ask. Period. Has always been. Has always will be — so the more customers you try to accommodate, the more complex your product variations, and supporting supply chain, becomes. And we’ve known this since long before Marshall M. Kirkman wrote the first Purchasing Manual.

Of course the supply chain becomes more complex as you go more global. Every locale has the potential to add languages, currencies, culture, local regulatory requirements, logistics challenges, border challenges, and so on and so on.

And then there are all the local issues faces by the suppliers — additional regulatory requirements, sustainability and CSR efforts to stay off of boycott lists, local workforce challenges, local disruption and disaster risks, and so on.

And of course trends affect complexity. They are usually the source … but they are not new issue. As we laid bare in our “future trend expose”, of the 33 trends commonly cited as future trends, only 3 were really relatively new, and only 1 was really a future trend.

Complexity has always been here, and the more global we get, the more complex we get. Nothing has changed, and if it’s not completely obvious at this point, you’re in the wrong profession.

That’s why SI has been preaching optimization and analytics since day one, since those are the only advanced sourcing solutions that can really handle the complexity of modern supply chains.

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