> It’s entirely possible to have an astoundingly effective supply chain while also knowing very little about it. Not only is it possible: it may be the enabling

> It’s entirely possible to have an astoundingly effective supply chain while also knowing very little about it. Not only is it possible: it may be the enabling condition of capitalism at a global scale. In Hayek's view, this is a defining characteristic of capitalism. There is a "structure of production", far too vast for any planner (or supply chain management expert) to comprehend. But it works anyway through a process of distributed information discovery coordinated in the minimum by prices. Put another way: without prices, it stops working at all, SAP or not. Where supply chain management mostly comes from is that to the extent that companies can add to price-based coordination, they can improve profitability for the participating members of the supply chain. The classic problem is "the bullwhip effect". We recognise a similar phenomenon in buffer bloat. Where you have local inventories and local optimisation, you can get a great deal of unpleasant oscillation.