SCCknow - Knowing supply chain complexity

Stephen Hawking commented that this century will be the century of complexity. This demonstrates the timeliness and relevance of this knowing supply chain complexity project (SCCknow). Most managers view complexity as a necessary evil, something to be tolerated as a fact of life. Anecdotal evidence, however, suggests companies can leverage complexity for competitive advantage. SC complexity (SCC) is defined as the number of SC nodes and the dynamic interaction between them. Until recently, SCC was discussed as having a negative impact on performance. This view is myopic and a more nuanced understanding of SCC is required. For example, some complexity is absolutely necessary as an additional product variant or another supplier could be needed to deliver requisite customer value and secure performance. Existing research neglects the positive effects of SCC and falls short to give guidance on how to identify a desired level of complexity and whether more complexity can be value-adding too not just value-dissipating. Therefore, SCCknow aims to answers the following research questions by applying a multi-method research approach. RQ1: How can complexity be measured from a node-, edge-, and SC level perspective? Based on a literature review, an interview series with SC experts in the US and Austria will be conducted, to develop a more nuanced understanding and measure of SCC. RQ2: How can be differentiated between value-added (= good) and value-dissipating (= bad) complexity? To better understand why and how companies pursue distinct complexity strategies, we employ an inductive study of ~ten leading manufacturers. RQ3: How can complexity effectively be monitored and visualized in a specific SC in order to manage a desirable level of SCC? Social network analysis will be applied to cover structural SC embeddedness. We will gather superior data sets about SCs, and visualize and monitor SCC. Superior data sets, because Dr. Gerschberger i) is logistics expert in the COVID crisis team of the Austrian government monitoring the entire Austrian grocery network, and ii) heads the Josef Ressel Centre for Real-Time Value Network Visibility and has access to SC data of 10,000 suppliers as well as suppliers of suppliers and 40,000 interrelations between them. Bearing in mind that companies have rarely data on their suppliers beyond their direct suppliers, these data set is extraordinary and very large. SCCknow tries to operationalize a more nuanced understanding of SCC allowing to differentiate between value-adding and value-dissipating complexity on a node-, edge-, and supply chain level, and will be the first attempt in SC research aiming to monitor and visualize SCC by developing generally applicable tools. The two main partners in SCCknow are Dr. Gerschberger (https://research.fh-ooe.at/en/staff/3686?tab=1; https://www.scl.gatech.edu/users/markus-gerschberger) and Dr. Montreuil (https://www.isye.gatech.edu/users/benoit-montreuil).

Erwin-Schrödinger-Fellowship Summary for Knowing supply chain complexity (SCCknow) Steyr, December 2, 2021 Applicant: Prof.(FH) DI(FH) Dr. Markus Gerschberger - University of Applied Sciences Upper Austria Academic partner: Professor Dr. Benoit Montreuil - Georgia Institute of Technology Stephen Hawking once commented that the twenty-first century will be the "century of complexity" - and it truly is. The SCCknow purpose was to understand and operationalize supply chain complexity in order to be able to differentiate between value-adding and value-dissipating complexity, and achieve visibility and monitor complexity in a specific SC. To do so, SCCknow aimed to answer the following research questions: RQ1: How can supply chain complexity be measured? RQ2: How can be differentiated between value-added (= good) and value-dissipating (= bad) supply chain complexity? RQ3: How can supply complexity effectively be monitored and visualized in order to manage a desirable level of SCC? To answer RQ1 and RQ2 an interview series with international companies (including interviews with 33 managers on various levels) was conducted in US and Austria. The underlying semi-structured interview questionnaire was developed based on a systematic and extended literature review. The literature review and the empirical findings from the interview series functioned as the basis for the development of a supply chain complexity (SCC) measure - capturing detail and dynamic aspects of complexity and allowing mangers to differentiate between value-adding and value-dissipating complexity. The practical applicability of the developed SCC measure was prototypically tested in a multiple case study. Finally, the developed SCC measure was applied and visualized in a supply chain control tower solution to answer RQ3. To the current knowledge of the PI, SCCknow results are the first to empirically show the relation between superior complexity management capabilities and profit margin. Therefore, it is very likely that the research findings have opened/further encouraged a promising new research agenda.