A measure of supply chain complexity incorporating virtual arcs

Abstract

Increased globalization, as well as the ability to have virtual supply chain partners, has had numerous effects on supply chains. While some of these effects are positive, making more resilient supply chains, there are also the negative effects of scale and complexity, making these supply chains more challenging than ever to manage. Having a means to measure the complexity is crucial for today’s managers to make more informed decisions. This measure must not only account for the number of arcs, but the amount of information and material carried on it, as well as incorporate the benefit that virtual arcs add to the network by increasing efficiency and reducing information, product and financial transfer costs and time. This research utilizes newer models in network clustering and complexity theory to make them applicable to supply chains and creates a new, practical approach to measuring supply chain complexity which can be easily implemented by practitioners.

Keywords

Supply chain / complexity / clustering / virtual networks

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