How to manage your supply network to get better results

The paper aims at providing a network diagnosis tool for the management of supply chains which can be very successful in evaluating and optimizing the performance of supply networks. Therefore, first of all, this paper gives an indication how variances within a supply chain can create great disturbances in the material flow over the own interorganizational boundaries. Analyses have shown that the standard deviation of the material flow of representative A-products can raise manifold along the supply chain. By investigating this phenomenon, also called the bull-whip effect (Lee, 1997), schedule instability was discovered as the root cause. To manage networks and to control the material flow over various links of the supply chain, a methodology, called network diagnosis system, has now been developed. Experiences with the application of this methodology have shown that not only the variances can be diminished, but also the cooperation between the different organizations can be significantly improved. Moreover, first results have also revealed, that the awareness of the involved members about the subsequent consequences and effects of local single actions within the supply chain is one of the most critical factors for a successful network management.