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Holism versus reductionism in supply chain management: An economic analysis

Ponte Blanco, Borja, Costas, José, Puche, Julio, de la Fuente, David and Pino, Raúl 2016. Holism versus reductionism in supply chain management: An economic analysis. Decision Support Systems 86 , pp. 83-94. 10.1016/j.dss.2016.03.010

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Since supply chains are increasingly built on complex interdependences, concerns to adopt new managerial approaches based on collaboration have surged. Nonetheless, implementing an efficient collaborative solution is a wide process where several obstacles must be faced. This work explores the key role of experimentation as a model-driven decision support system for managers in the convoluted decision-making process required to evolve from a reductionist approach (where the overall strategy is the sum of individual strategies) to a holistic approach (where global optimization is sought through collaboration). We simulate a four-echelon supply chain within a large noise scenario, while a fractional factorial design of experiments (DoE) with eleven factors was used to explore cause-effect relationships. By providing evidence in a wide range of conditions of the superiority of the holistic approach, supply chain participants can be certain to move away from their natural reductionist behavior. Thereupon, practitioners focus on implementing the solution. The theory of constraints (TOC) defines an appropriate framework, where the Drum–Buffer–Rope (DBR) method integrates supply chain processes and synchronizes decisions. In addition, this work provides evidence of the need for aligning incentives in order to eliminate the risk to deviate. Modeling and simulation, especially agent-based techniques, allows practitioners to develop awareness of complex organizational problems. Hence, these prototypes can be interpreted as forceful laboratories for decision making and business transformation.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Uncontrolled Keywords: Drum-Buffer-Rope; Model-Driven Decision Support Systems; OUT Policy; Theory of Constraints; Throughput Accounting.
Publisher: Elsevier
ISSN: 0167-9236
Date of First Compliant Deposit: 7 February 2017
Date of Acceptance: 31 March 2016
Last Modified: 28 Jun 2019 12:37

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