Lacking an official or broadly recognized definition of supply chain dynamics, I will present my own definition and interpretation. As the field is still new to me, these may change as I learn more and develop my understanding.
Definition
“Supply Chain Dynamics” is a field of studying supply chain management from the point of view that supply chains are stochastic, dynamic systems.
This point of view does not conflict with any other definitions of supply chains. It simply takes a perspective, which highlights the complexity of supply chains and the significant effects of variability. It also allows one to work at a higher level of abstraction to reach general results which can be applied in several specific situations.
Areas of study
Variability and complexity are the two key factors which drive the dynamics in supply chains. They are the reasons why supply chain management is both interesting and difficult. Hence, these are the principal topics in supply chain dynamics.
We study these concepts from different angles:
- What are the sources?
- What are the effects?
- How do we optimize the supply chain given the inherent variability and complexity
When looking at sources of variability and complexity, we seek to understand how we can manage (reduce or control) the variability from different perspectives.
If we understand the effects, we can identify which sources of variability and complexity have the largest impact on supply chain performance, hence where the biggest potential for optimization may lie.
Examples of Supply Chain Dynamics
The classic illustration of supply chain dynamics effects, known by most supply chain professionals, is the beer game. The beer game illustrates the so-called bull whip effect which is a label for the phenomenon that demand variability increases upstream in a supply chain. There are several different underlying causes of the bull whip effect, both behavioural and structural / operational.
But everyone working in supply chains experience dynamics all the time. Variability caused by demand uncertainty and late deliveries due to machine failure or supplier issues are everyday examples of supply chain dynamics. From a supply chain dynamics perspective we take a system view on such issues and search for approaches to dealing with these matters based on more than intuition.
Approach and Methods
In general, supply chain dynamics is about taking a holistic perspective to optimisation. A decision or event in one part generally has effects on many other parts, and therefore it is key look at the full picture.
In trying to grasp how variability and complexity affect supply chains in different settings, we will often take an approach based on science and mathematical methods. In addition to analytically derived results where possible, simulation is probably the most used method for gaining insights in supply chain dynamics.
More basic supply chain principles are certainly still valid, and in supply chain dynamics we seek to explain the validity of different concepts and highlight the assumptions under which these ideas work.
A very big contribution to both variability and complexity comes from human behaviour. Consequently, behavioural sciences and related topics are highly relevant in supply chain dynamics.
Foundation of Supply Chain Dynamics
Parts of supply chain dynamics comes from the general system dynamics field which is considered to be founded by Jay Forrester at MIT around 1960 (Sterman, 2018).
Other parts of supply chain dynamics arise from studies of manufacturing processes with focus on the performance of manufacturing lines under assumptions of variable process times and job arrivals.
I am planning to write a brief overview of the some of the foundation for supply chain dynamics of which I am aware.
Related fields
As should be clear from the above, there are many fields which are related to supply chain dynamics. These range from hard core mathematical fields which provide methods for studying supply chain dynamics over fields which look at supply chains from a more classic business school perspective to fields related to human behaviour.
References
John D. Sterman: “System dynamics at sixty: the path forward”, System Dynamics Review vol 34, No 1-2: pp. 5-47, 2018
Wikipedia on the bull whip effect: Bullwhip effect – Wikipedia
Wikipedia on the beer game: Beer distribution game – Wikipedia