Complexity Management in the Supply Chain: Theoretical Model and Empirical Investigation in the Italian Household Applia
This paper describes a research program investigating the impact of complexity on manufacturing industries: the innovative perspective of this study is represented by the focus on every function of the company and on different stages in the supply chain.
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Introduction ................................................................................................. 382 2
Background ................................................................................................. 383
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A Conceptual Framework to Complexity ................................................... 384
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The Empirical Study ................................................................................... 392
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First Results ................................................................................................ 395
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Concluding Remarks ................................................................................... 396
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References ................................................................................................... 397
Summary: This paper describes a research program investigating the impact of complexity on manufacturing industries: the innovative perspective of this study is represented by the focus on every function of the company and on different stages in the supply chain. A methodology results which helps assess the optimum tradeoff between improving effectiveness peiformances (e.g. variety) and reducing efficiency performances. A classification of complexity dimensions and of potential sources is provided, together with a selection of physical drivers which work as intermediate variables and as output variables. After that, a scheme for treating and interrelating these variables is discussed, thus defining a conceptual model for the complexity issue. Finally, the paper presents some early results acquired from the application of this methodology to the Italian Household Appliances industry. Keywords: Supply Chain Management, Complexity Reduction, Complexity Management, Household Appliance Industry. S. Seuring et al. (eds.), Cost Management in Supply Chains © Springer-Verlag Berlin Heidelberg 2002
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G. Miragliotta, M. Perona, A. Portioli-Staudacher
Introduction I
Technology innovation, globalization of markets and more and more demanding customers are trends companies cannot escape. Beating the competition is based on mastering this evolution, and particularly mass customization: customers have all their basic needs satisfied and want their specific needs fulfilled as well. Companies have to supply an ever-growing number of products at the same, at even lower prices, tailored to customers' individual needs, causing a ballooning ofvariety and a fall in lot sizes. As an example, in the mid 1960s the Chevrolet Impala .was the best selling car in the USA. The platform on which it was based was selling l.5 million units a year. In 1991 the best selling car was the Honda Accord, and the platform on which it was based was selling 400,000 units a year. Despite the increase in the market size the number of units per model decreased by a factor offour 2 . After exploiting all internal resources in seeking efficiency improvements, companies have started to focus more closely on their supply chain, seeking an overall cost reduction and increase in eff
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