Toward complexity: The impact on the traditional supply chain management by decentralized control — A view from a Supply and Demand Network (SDN)

In the overall control of a classic sense, the producers in the traditional supply chain can have control over the sales agents or retailers and reach the stable equilibrium by wholesale-price plus subsidy contracts. However, when things processed are complex and decision-making decentralizes in various system nodes, the traditional description is definitely inadequate. Thus, this article discusses the impact of the decentralized decision-making and decision-making period on the supply chain and proves that, as a result of the impact, the supply chain system cannot always be optimal.

I. INTRODUCTION

The traditional SCM theory suggests that in a classic sense there is a control center which dominates the entire system. Although the evidence is not yet mature, critical perspective coming from the impact by chaos science and complexity science argues that relationships in complex systems, like organizations, are nonlinear, and the future cannot be predicted in advance, and the order should take a self-organizing form [1], [2]. Scholars supporting this view, as a result, try to introduce the complexity study theory into enterprise management and put forward the concept and management model, “Supply and Demand Network with multifunction and opening characteristics for enterprises, SDN” based on the complexity.