Supply Chain Complexity Meaning and Quantitative Research

With the trend of globalization and personalization, supply chain is becoming more and more complex, leading to a decline in the flexibility of the supply chain, manifested by slow response, long lead time and high inventory levels, etc. To simplify the complexity of the supply chain, we must understand the complexity of the supply chain. Therefore, this paper summarizes the previous views on the complexity of the supply chain, analyzes the imperfections, and then explains the meaning of the complexity of the supply chain. This paper divides the complexity of the supply chain into three parts: network complexity, process complexity and product complexity, and then proposes corresponding quantitative methods. The complexity of supply chain network is divided into three aspects: hierarchical structure, number of nodes and interaction of nodes. On the basis of previous studies on the hierarchical structure and the number of nodes, the interaction between nodes is quantified by topological analysis taking geographical factors into consideration. Process complexity: at the macro level, operation time is used to measure the complexity of each link of the supply chain business process; at the micro level, information entropy is used to measure the uncertainty of the operation time of a certain link. Product complexity can be divided into single-product production complexity and multi-product category complexity. Since many scholars have studied the production complexity, this paper focuses on the study of multi-product category complexity and calculates the difference of activity-based cost between multi-product and typical single-product to measure the category complexity. By defining and quantifying supply chain complexity, this paper helps enterprises consciously reduce the complexity in the management.