Operational Excellence in Logistics and Supply Chains

 

Within the last decades, markets for products and services have undergone profound changes. New product features and design variations have increased the variety of offers visible on traditional and electronic markets.

Sophisticated technologies have driven the need for specialization and thus, the division of work. Supply chains have come to span more players in the processes of value creation, with a need for more coordination, and they have become more globally connected.

Links between businesses have changed from simple transactions to much more sophisticated collaborative relationships. Suppliers are becoming strategic partners who are fully integrated in their customers' development. Processes cross company borders and thus have to connect technology and people in multiple enterprises.

The reasons for the growing complexity of products, structures and processes are manifold. From a demand perspective, heterogeneous customer preferences, variety-seeking and transaction cost minimizing efforts drive the complexity of market offers. From a supply-side view, the trend towards more complexity is motivated by technology innovation, globalization, and the attempt of keeping new entrants out of the market.

We will not discuss whether a certain degree of variety is efficient or useful. The question whether there can be too much choice in buying or other decision processes is investigated by Iyengar (2011), among others. Here, we take the present complexity on markets, within and between enterprises as a fact.