Four Reasons to Reduce Complexity

By Brent Ray

October 25, 2011 at 8:11 AM

Complexity can kill any organization. Just think about the “red tape” involved in getting an answer from some of the really large organizations you may be associated with. Small companies with lean management strategies often tout the value of their nimbleness in responding to problems, questions, concerns and so forth, noting that it stands in stark contrast to some of their larger competitors.

Well, when it comes to the supply chain, many large companies are heeding the complexity warning these days and are searching for ways to simplify and streamline every aspect of their supply chain operations. In a recent post to Supply Chain Management Review online, blogger Robert Rudzki points to four key ways complexity can hurt companies. He says complexity

  1. Tends to increase costs
  2. Can adversely affect the resilience of your supply chain
  3. Makes risk management difficult
  4. Tends to slow down decisions and actions.

To illustrate his point, Rudzki uses a recent Supply Chain Council discussion about the need to respond immediately and decisively to emergencies and supply chain disruptions. To put it simply, organizations must be quicker on their feet these days—an issue that became all-too-clear in the days following Japan’s earthquake, tsunami and resulting nuclear crisis earlier this year. The event tested the resiliency of companies in the electronics and automotive sectors, in particular, and placed a renewed focus on the need for a streamlined supply chain.

Such needs can be applied locally, as well. A streamlined department, warehouse or customer service center can make a world of difference for customers—both internal and external—who are seeking quick resolution to their problems. There are many ways to “streamline” your organization, not the least of which is implementing the right technology solutions to reduce effort and improve speed and efficiency.  

Take a hard look at your processes and procedures. How many approval levels are needed to get something accomplished in your organization? Do you have multiple people performing the same task? Are your procurement strategies based on a “just in time” or “just in case” philosophy? The latter may be costing you more in time and money than you think. 

Evaluating the level of complexity at even the lowest levels of your organization can be an eye-opener for many companies—and it can put you on the right path to improvement.

 

 



Tags: Strategic sourcing Supply chain management Procurement Lean manufacturing
Category: Blog Post

Brent Ray

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As founder and CEO of OrderZone.com, Brent D. Ray has over 20 years experience in wholesale MRO and OEM distribution, supply chain consulting and business-to-business marketing. He is an experienced MBA professional with a broad history of entrepreneurship and business development credentials. 

He’s served as a strategic consultant and value added partner to Fortune 1000 firms. In addition to his executive and supply chain experience, Brent possesses experience related to the latest web-technologies including Web 2.0, RIA, SaaS, web APIs, mobile computing and advanced UI design.


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Posted by Sequoia on
That's 2 celevr by half and 2x2 clever 4 me. Thanks!
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