Supply Chain Performance and its Topological Features

Perhaps this research by Pero et al. can support small and medium sized companies with the design and redesign of its supply chain network.
The goal of the study was to analyze the connection between topological features of the supply chain and the resulting supply chain performance.

Method and Model

The authors used simulation techniques and statistical analysis to simulate a pull based supply network. The network consists of a retailer-, distributor- and manufacturer-level.
Demand and lead times were random, the supply chain performance was measured with stock outs that occured.

Results

The results show that:

• An increasing number of nodes at each level increases the probability of stock outs.
• The performance of the supply chain was not affected by the number of levels in the supply chain and the distance between the nodes.
• Furthermore the number of sources for each node seems to increase the risk for stock outs.

Conclusion

Due to their simple structure the results are very compelling. To get the perfect supply chain performance all you have to do is following the above mentioned “rules” (results).

But you have to keep in mind the premises on which the model builds:
For example, supply chain performance is only measured in terms of “stock outs”. Stock out should never be the single performance measure you rely on, since there may not be a direct correlation with more important company goals like profit, …

Besides, it would be advised to model your own individual supply chain to accommodate for your specific configuration and needs. Especially strategic decisions like the supply chain configuration should be important enough to not take the shortcut.