Bottleneck management in supply networks: Lessons to learn from a synoptic systems perspective

Abstract

Networks of organizations are the predominant form of value creation in manufacturing industries and are becoming more complex as complexity of products and specialization of knowledge increase. A higher level of collaboration among organizations changes the distribution and types of benefits and risks in supply networks. Some of the risks result from increased dependence on other organizations in the network as these take over larger portions of value creation or functions closer to the very core of the product. With a great share of value-added being created by suppliers, reliability of the supply network becomes a more pressing issue. Bottlenecks in such networks can turn into major impediments to the success of the focal firm. Drawing on literature on bottleneck analysis, production planning, systems theory and supply chain risk management, this paper examines some commonalities and differences between local production systems and supply networks with respect to the emergence of bottlenecks and how they can be managed.