Advances on measuring the operational complexity of supplier-customer systems

Even structurally simple supplier-customer systems can be operationally complex. This operational complexity can be colloquially defined as the uncertainty associated with managing the dynamic variations, in time or quantity, across information and material flows at the supplier-customer interface. This paper proposes a means of measuring the information demands placed on supplier-customer systems, as a result of this uncertainty. This paper mathematically models the operational complexity of supplier-customer systems from an information theoretic perspective. A unique feature of this measure is that it captures, in relative terms, the expected amount of information required to describe the state of the system. The measure provides flexibility in the scope and detail of analysis, while at the same time allowing a systematic hierarchical approach. The application of the measure allows valuable insights to be obtained in terms of the degree of uncertainty, level of control and the detail of monitoring required to manage the operational complexity of supplier-customer systems. (c) 2004 Elsevier B.V. All rights reserved.