, however, is difficult. The difficulties are partly due to the complexity induced by the large number of related and interdependent activities in the supply chain. The fact that the effects of certain actions are separated from their cause both in time and place increases complexity, and is made even worse by the functional division of responsibility along the supply chain. Understanding the interdependencies and the complex causal relationships in a supply chain is therefore crucial to the successful management of these activities. It is important to realize that what you do not understand, you cannot manage.
Systems thinking offers a method for describing and analyzing problems in such contexts, and is therefore well suited to solving the complex and dynamic socioeconomic problems found in logistics systems today. However, the problems reported by many organizations show that the use of systems thinking is insufficiently developed, although it has been with us for several decades. Senge (1992) elaborates on this theme, and claims that firms seem more concerned with detail - as opposed to dynamic - complexity. If firms deal only with detail complexity, they are obstructed from seeing how relations of different kinds reach beyond their own firms and change over time. The nature of the problems reported indicates that many organizations act as autonomous units instead of components of a larger system, and thus neglect the width and scope of their interdependencies with other firms.
Unfortunately, the lack of systems thinking also influences how firms approach another important area: the design of performance measurement systems. A performance measurement system plays an important role in managing a business as it provides the information necessary for decision making and actions. Although this area has been pointed out many times as strategically important, it still is not sufficiently understood (Keebler et al., 1999; Atkinson et al.,...