The Cost of Complexity
Recently, we have been working with the Global Planning Team of a major oil company.
We were asked “What is the cost of complexity and what is the effect of range on this cost?”
At one level the answer is easy: “It is the cost associated with having more than one customer and product. The more complex the supply chain the higher the overall cost per unit supplied.”
“Yes, but how do I know how much my costs will go down if I take products out of the range.” There isn’t a simple answer to this question.