Note: Today’s post is part of our “Editor’s Pick” series where we highlight recent posts published by our sponsors that provide practical knowledge and advice on timely and important supply chain and logistics topics. This post from Elemica’s blog discusses Chaos Theory, the Butterfly Effect, and their links to supply chain management.
Chaos Theory: The idea that separate systems, operating in seemingly random acts, are governed by highly volatile laws and patterns. This, most likely, isn’t the first thing that comes to mind when discussing logistics and supply chains, but this thought exercise just may help reveal some powerful insights and make a case for digital transformation.
Take the Butterfly Effect for example: A phenomenon that suggests relatively small events can influence complex systems to create larger and larger impacts down the line. It’s no secret that minor setbacks in our supply chains can have major ramifications on things like delivery schedule, inventory availability and customer relationships. But let us walk through an example to illustrate how a small, minute change grows into a multitude of compounded issues, and discuss how digital connectivity across the supply chain could solve them.
Let’s say we’re an industrial pipe supplier and we’ve been contracted to supply piping and fittings for a refinery expansion in Louisiana. There are a lot of moving parts in the project, and the products we’ll be supplying are critical to moving on to the next phases of the expansion. Today, the raw material is scheduled to arrive at our pipe manufacturing facility, but it’s nowhere to be found.
Let’s pause here and quickly discuss the power of transparency and real-time data. In a connected and digitized supply chain…