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dx.doi.org/10.1108/01443570210412088
(2001),"Supply chain complexity and delivery performance: an international exploratory study", Supply Chain Management:
An International Journal, Vol. 6 Iss 3 pp. 106-118 http://dx.doi.org/10.1108/13598540110399110
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This article describes the work carried out in Cambridge University, CSC
Manufacturing Practice and British Aerospace to develop and use a measure
for manufacturing complexity.
One of the difficulties in developing a coherent operational strategy is in
knowing how the various elements of a manufacturing system interact and
assessing the relevant importance of each. The approach taken in this article is
to look at the manufacturing system in terms of how complex it is, and then
measure the contribution each operational source makes to its total complexity.
However, that requires a common measure to be developed, which can
justifiably claim to meet the requirement.
The article therefore starts by giving an outline of the derivation of the
mathematical model used to construct the measure. Then the model is
interpreted to see whether it behaves in a reasonable way and makes useful
predictions about the systems it is measuring. This leads to a discussion of how
the tool might be incorporated into a strategy development exercise. Finally,
three applications in operational environments are described along with the
resulting analysis. The analysis allowed the local management, in each case, to
identify the key areas of weakness, in both the short and medium term. As such
it gave one possible basis for developing an operational strategy for each of the
manufacturing units visited.
The authors would like to thank the ACME directorate, who partially funded the research, and
International Journal of Operations British Aerospace for their support and for allowing the results of two of the trials in their
& Production Management, Vol. 15
No. 5, 1995, pp. 26-39. MCB factories to be published; and finally to Dowty for allowing a trial in one of their factories to be
University Press, 0144-3577 published.
area. Here complexity is the minimum number of steps required to achieve a Complexity as
desired degree of accuracy in the execution of an algorithm. an aid to
It was realized that the measurement of manufacturing variables follows the strategy
same logic. For example, statistical quality control requires repetitive sampling
where the sample size has been determined by some required level of accuracy.
Thus the measurement process itself is an iterative procedure which converges
and which is halted at some distance from its goal. 27
To proceed to a more formal definition, envisage a system S as consisting of N
mutually exclusive states s(i), each of which has a finite and measurable
probability associated with it. The system is observed at discrete time intervals
to see how it evolves. Using a standard result[1] the number of observations
needed to achieve a desired level of accuracy, for N 1 independent variables, is:
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N 1
nmin =
{ }
(1)
4 min
2
1
since N 1 of the states represent the independent variables, and each has to
achieve the required level of accuracy , with probability . On this basis the
complexity of the system is n nmin.
However, there is a problem, for if a function is to be used as a measure then
it must exhibit the mathematical properties of one. These are that for to be a
measure on a system S, it must meet the following three requirements[2]:
( S ) = 0 when N = 1 a system with a single state
f ( S ) > 0 when N > 1
M
S 1 , , S M = S m (2 )
m = 1
Nj 1
nmin M
4 min
2
{1 }
where Nj is the number of states in the jth subsystem. Therefore n ( nmin), the
complexity figure violates condition three in equation (2).
The approach, therefore, is to develop an expression which meets the third
requirement and can thus be described as a measure for the system. The
IJOPM starting-point is to look at the measurement process itself. The system will be
15,5 observed at regular intervals over time. It will be seen to occupy a sequence of
states and this sequence is assumed to be stationary and ergodic. The latter
property means that the probabilities of states occurring can be approximated
to by the ratio of the total observed occupancy time of that state, to the total
time over which the system is observed. If state i has been observed m(i) times
28 consecutively at time intervals t, then an estimate of the total occupancy time
is given by [m(i) l] t. If, for simplicity, this is written as n t then an
observation of the system can be represented by the n-tuple {n(i)t, , n(j)t},
where there are n observations of a system consisting of N states (n(i), n(j)
.{N}). This sequence can occur C ways, where C is given by the multinomial
coefficient (since the t cancels top and bottom):
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n!
C=
n(1)!n( N )!
Using Stirlings approximation this can be written:
(2n )1 / 2
C
n(i )
n( i )
(2n ) N /2
n (i )
1/2
N n
for large values of n. Taking logarithms to give the additive property required
for a measure and using the law of large numbers gives
log C
p(i )log2 p(i ) = ( S ) (3 )
n n
N
where (S) is the desired measure and represents the entropy per stage.
We choose base 2 for the logarithms for two reasons; first it ties in with
information theory. Second, it can be thought of as counting the sources of
uncertainty when applied to real world systems, in the sense of their being
either present or absent.
However, successor states do not have to be independent of predecessor
states. It can be shown that the various states s(i) can be linked to any number r
of preceding states[3], through the existence of conditioning and that sequences
of states can be categorized by the length of their memory r. Moreover, by a
suitable choice of the defining probability space, the sequences can all be shown
to have the Markov property, i.e. each (suitably defined) state only depends on
its predecessor. Such sequences will be referred to as trajectories.
The Markov property therefore means that only two categories need to be
considered; sequences with values of r = 1, i.e. having the Markov property
(trajectories), and sequences of values r = 0. These latter represent cases where
each observed outcome is independent of every other one, such as the results Complexity as
obtained from rolling a die repeatedly. an aid to
strategy
Applying the model to a manufacturing process
A more appropriate model for manufacturing allows the system to have a
countably infinite number of states, instead of restricting it to N as in (3). Such
systems have finite entropy where the state probabilities follow a geometric 29
probability law which also represents the maximum entropy the system can
take.
We consider the manufacturing process to consist of an input of items, a
process (for example a work centre) and an output. We let the states of the
process be the number of items present at any one time. If it is stationary then
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with an entropy of
1
H (S ) = ( ) log2 1 + log2 ( 4 b)
( )
H(S ) represents a process S with countably infinite states. Equation (4a) is the
well known formula for a simple queue with Poisson arrivals at a rate and
exponentially distributed service times of 1. The significance of the two
equations is, first, that (4a) was derived without any assumptions about the
nature of the queue; in fact not even that there is a queue in the accepted sense.
Second, the simple queuing model forms an upper bound, in entropy terms, for
any queue found in practice.
Moreover equation (4b) increases as approaches , in other words as the
process nears its capacity. Thus the busiest systems (the bottlenecks) are also
the most complex. However most significantly, the term 1/() represents the
expected time in the process and 1/( ) 2 its variance, so that increasing
complexity means longer lead times and less reliable systems. This is one of the
key reasons why measuring complexity is valuable in assessing operational
strategy.
Equations (4a) and (4b) can be generalized to networks of queues simply by
adding the complexities from each of the processes. This is made possible
IJOPM because the entropy of two or more independent processes is always greater
15,5 than the entropy of the same two processes where dependency exists. An
analytical version of (4a) for networks, derived from queuing theory, can be
found in [4] for example.
In practice, queues are of finite length even if it does not always seem like
that. Therefore knowing (4b) is an upper bound we can write;
30
H(S ) = H(ST ) + H(S NT ) (5)
where the suffixes stand for tolerated and non-tolerated. The former are states
we tolerate and can be thought of as tolerance limits. Non-tolerated states
represent the process running out of tolerance.
As the above analysis has reintroduced the Markov property we can surmise
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P log2 P + (1 P )log2 (1 P ) +
H ( S ) = (1 P ) pq ij log2 pij + pm ij log2 pij
q m
+ (6 )
M b N b M q N jq
j
p ij log2 p ij
b b
M m N j m
where p q are the probabilities of queues of varying length (>1), pm are the
probabilities of having a queue of one or zero; the make states of the operation
and pb are the probabilities of Bernoulli states, the non-programmable states.
The independence of the queues (and of the Bernoulli states) allows each Complexity as
resource to be measured independently, for M resources. Moreover Njq + Njm + an aid to
Njb = Nj , the number of states at resource j. The presence of the square bracket
with the (1 P ) term outside arises because the tolerated and non-tolerated strategy
states are not independent.
The formula (6) is called the dynamic complexity. The term dynamic refers
to the system rather than to the statistical processes, since they are assumed 31
stationary.
A useful development of the formula is to consider the value of the make
component over a long time. This involves putting P = 0, since there is no
control element; pbs to zero, as breakdowns are dynamic issues; and pqs to zero
as only the make states are involved. The final step is to let time tend to infinity.
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Infinity has usually been taken to be a year! Equation (6) then reduces to:
Equation (7) is called the static complexity. It reflects the complexity of the
structure of the operation, and demonstrates that such complexity only has
meaning when considered in terms of the demand placed on it.
It must be emphasized that the outline given both in the last and in this
section is very sketchy. Any reader who is interested in the full development of
the ideas should see Frizelle[5].
second.
What are the grounds for claiming that? The first is intuitive. Adding each
new product will have a decreasing additional impact. After all if there were
1,000 products involved then adding another one would have little effect on the
overall impediment to flow. Following such intuitive reasoning, the marginal
impact of a second product will be to increase the impediment by 50 per cent or
1/2, so that the total impediment will be 1.5 (as opposed to the theoretical value
of 1.58).
However, there is also a sound theoretical reason and that comes from the
well-known fact that:
x dy
log e x = 1 y
which is the summation of the (infinitesimal) incremental change divided by its
total value up to that point. Hence the weighting is consistent with the notion of
resistance to flow caused by other operations present on the resource. One must
be careful not to say it is the resistance to flow, for entropy is a general concept
which has simply been applied in a particular context.
In information theory, the unit is the bit. However, an alternative unit is
suggested, which gives some sense of what is being measured. At its simplest
the measure counts the number of product processes. Since the weighting gives
the incremental effect of adding more products per process, the unit being
proposed is the equivalent product processes or epp.
quite wide conditions with the addition of ever greater levels of detail. This
hierarchical structure allows for comparative measures to be taken, as
comparable levels of detail can be specified from the outset. Thus different
systems can be compared or the same system can be assessed at different points
in time. It is therefore meaningful to talk of one system being more or less
complex than another.
There are two other conclusions that can be drawn from equation (6) which
tend to underline its validity as a model for a manufacturing system. The first
is that, if the control term (P ) were applied twice, with everything else staying
the same, then the dynamic complexity would increase. This is equivalent to
adding a second layer to the control bureaucracy. In other words, more
bureaucracy can only be justified if its introduction eliminates more disorder
than its arrival automatically creates.
The second conclusion comes from the observation that adding more terms
within the square bracket, all other things being equal, can only increase the
overall value of the dynamic complexity. This means that control can only be
exercised downwards.
The fact that all of the elements are measured on a common basis means that
the measure gives a uniform way of comparing the impact that each has on the
whole. Thus courses of action can be prioritized based on how much complexity
each source introduces, starting with the question of whether complexity
reduction is achieved through better management of the existing operation or
through simplifying the structure. The sums of money are potentially large.
The introduction of a scheduling system or JIT, for example, is costly.
Structural simplification is likely to involve significant capital outlay so that
any decision needs to be taken in the context of an overall strategy.
Measurement
The measure is intended to provide manufacturing management with a
practical tool that will help them focus on key issues. It therefore deliberately
steers away from including too many theoretical models such as the analytical
form of the queuing model in equation (4a). In this way the technique is thought
to be more robust and therefore more widely applicable. However, the
requirements of the proofs for (6) and the structure of (6) itself, particularly its
recursive form, give a useful framework for undertaking a study.
At the start of the study, the area to be examined needs to be clearly
delineated. The sample size and sampling frequency are determined in advance.
The degree of detail will be dictated by the availability of data, and in particular
by the least detailed source. Each term within the square bracket in (6) must
have the same level of resolution.
In carrying out the observations, the assumption is that the system will
exhibit reasonably stationary properties over relatively short periods, such as
two weeks. This seems to have been true in the three operations studied to date.
The work involves observing queues and the states of the resources, e.g.
making, being set up, out of production or idle, at equal intervals over the
predetermined period. Much leg work is required and a study needs at least two
people to carry it out. From such data the probabilities can be estimated in
terms of inferred occupancy times, and the dynamic complexity is calculated.
The static complexity has been derived directly from the companys data-
base. It takes the bills of material, routeings, and work centres along with the
demand pattern over the year, to determine the loadings. The period of a year Complexity as
has been chosen to eliminate seasonality. This procedure has the added an aid to
advantage that data accuracy and completeness can be checked at the same strategy
time. The findings from that exercise alone can be salutary for management.
If either the static or the dynamic data set covers periods of really abnormal
working, then the data relating to them must be excluded from the analysis. In
such conditions the assumptions of stationarity are invalid. 35
Results
Three trials have been carried out to date. Each one was done at a distinct site
in order to cover a spectrum of manufacturing processes. Their goal has been to
prove the practicality of the technique, develop the supporting software and,
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above all, to ensure that the results were meaningful and useful to the
management of the factories[6].
Trial 1
The first was carried out in a conventional machining section of a production
line. It consisted of five processes comprising 19 machines or workstations with
a parts list of 352 items. The products were large, precision-engineered
components. The perceived problems were an inability to meet schedule
through lack of capacity and quality problems.
The static complexity was calculated to be 95 equivalent product processes.
This can be seen roughly as follows. With a five-stage process there will be
around three machines per stage. These can be thought of as providing the
equivalent of three parallel lines, and in fact there was a great deal of
interchangeability between machines. On that basis there would be 117 items
per line, whose log is 6.87. Multiplying by 15, the number of independent
processes gives a static complexity of 103 epp, fairly close to the observed figure
of 95. However, it is dangerous to assume that the figure can always be
approximated to in this way. A reasonably close result was obtained here
because of the structure of that particular operation. In other cases it does not
work, as will be seen in the next two examples. The correct procedure must
always be followed.
The dynamic complexity overall came out at 115 epp, so the dynamic element
adds very little to the static core. In fact the bar chart in Figure 1 shows how
the elements are made up, with the dynamic contributions shown merely as the
amount added to the static.
The obvious conclusion is to look at simplification. However, that was not
feasible as the majority of the static complexity came from the product range
itself, and reducing that was not an option. That left programmable states as
the next area to consider. Two issues emerged. The first was that there was a
high idle component in the figure, and second that there was a considerable
amount of unplanned subcontracting. This latter revealed itself by high queue
variation at the points where parts were sent out from, and received back into
manufacturing.
IJOPM Test 1
15,5 100
80
60
40
36 20
0
Complexity
Key:
Static
Figure 1.
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Trial 2
The second trial was carried out in an NC machine shop consisting of 35
processes, 59 machines or workstations processing 350 part numbers. The
operation makes small precision-machined components for high technology
applications.
Here the static complexity, shown in Figure 2, came out at 96.4. At first sight
this is surprising as it is little higher than the preceding case, even though there
are far more machines and processes involved. However, the number of part
numbers is almost identical to Trial 1. Moreover, in contrast with the previous
exercise, every part does not go through every process. It shows how
misleading rough calculations can be.
This time the dynamic complexity came out much higher than the static at
160 epp, with programmable states being the biggest contributor at 78.4 epp.
These results are shown in Figure 2 (note that the total dynamic complexity is
shown, not the incremental figure given in Figure 1).
The results indicated that operational problems predominated, and here was
the place to start. The high contribution from programmable states suggested
difficulties with volatile mix, batching and/or unstable flow. Further analysis of
the figures revealed the biggest issue to be queue stability, while the inspection
function showed up as the bottleneck.
It was proposed that the immediate solution was to introduce queue control,
to calm the turbulence in the flow and to relieve pressure at inspection. The
result would be more reliable delivery promises, and a reduction in work in
Test 2 Complexity as
200
an aid to
150 strategy
100
50
37
0
Complexity
Key:
Static
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Figure 2.
Dynamic total Bar chart showing the
composition of the
Dynamic programmable complexity (test 2)
Trial 3
This was carried out on a production line consisting of machining and
assembly. There were 74 machines or work centres, involving 57 processes and
126 active part numbers, the whole operation being controlled by a kanban
process. The factory made high technology aerospace defence systems and the
exercise covered the entire operation.
Figure 3 shows the results from the exercise. Static complexity was
calculated to be 75 epp. This is not surprising because many fewer part
numbers are involved, even though there are high numbers of machines.
However, they are more intensively used than in Trial 2, so the static does not
drop proportionately.
The dynamic complexity came out at 145 epp, which was a surprise as the
assumption was that the kanban system would make for even flow. Indeed the
manufacturing management prided themselves on their operational control.
Here again the queue element showed up as the largest contributor. The results
are shown in Figure 3.
A more detailed analysis of the figures revealed that the machining area was
indeed well controlled, but not so the assembly. Much of the problem arose
through poor synchronization between the two. Moreover, as with the previous
IJOPM trial, the bottleneck was at inspection. It was being caused by rework problems
15,5 that the plant was experiencing. While the latter conclusion was no surprise to
management, the discovery of the lack of synchronization was. There were
opportunities for inventory savings as a result.
As with Trial 2, there were longer-term opportunities for simplifying the
process. This shows up both in the static complexity and, to a degree, in the
38 queuing figure. As each process contributes to the overall, the more processes
the higher the figure, even if individual contributions are relatively small. There
is, after all, a well-known drawback with kanban processes that in long
routeings they tend to create rather than diminish work in progress.
Conclusions
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Test 3
150
100
50
0
Complexity
Key:
Figure 3. Static
Bar chart showing the Dynamic total
composition of the
complexity (test 3) Dynamic queue
one of the researchers. He was then given the results to interpret blind. The Complexity as
conclusions given above were based on this analysis. an aid to
Future work will look in more detail at the opportunities provided by static strategy
complexity to help in the planning and introduction of new products. Two small
exercises have been carried out and gave encouraging results. Also the
extension of the measure for use in other types of system will be explored.
39
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