Applying Occam's Razor to Simplify Supply Chain Complexity

In the business world, we often hear the phrase "keep it simple" when it comes to problem-solving. It's a concept that's been around for centuries, and it's known as Occam's Razor. Occam's Razor is a principle that states that when faced with competing explanations for a problem, one should select the solution that makes the fewest assumptions. In other words, the simplest explanation is often the best one.

However, when dealing with complex business challenges, the idea of simplicity may not always apply. In fact, complex problems require complex solutions, and Occam's Razor may not be the best approach. This is where Ashby's Law, also known as the Law of Requisite Variety, comes into play. Ashby's Law states that only variety can destroy variety, meaning that only complex, multi-faceted theories, hypotheses, or explanations can match complex, multi-faceted challenges.

When faced with a complex business challenge, it's essential to gather all the facts, opinions, ideas, and perspectives from all the right people. This includes individuals within the organization, as well as consultants, experts, partners, and customers. Only by taking a comprehensive approach can one understand the problem from all angles and develop a multifaceted solution.

While Occam's Razor may apply in some instances, it's not the be-all and end-all when it comes to complex problem-solving. In fact, the simplest explanation is often not the best one. Rather, a complex challenge requires a complex solution, one that involves multiple tactics, experiments, and additional complexities that require further fact-finding.

So, while it's essential to keep things simple when possible, it's equally important to recognize the value of complexity when dealing with complex business challenges. By taking a comprehensive approach and involving all the right people, businesses can develop multifaceted solutions that address complex challenges head-on.

Cut Through Supply Chain Complexity by Finding the Right Red Flags

It’s not about making your supply chain simple—it’s about removing the wrong complexity while adding the right detail where it counts. If your S&OP and planning processes are full of exceptions, manual workarounds, and constant expediting, you’re dealing with noise, not “requisite variety.”

Download our Red Flags in S&OP infographic to quickly spot:

• Where complexity is hiding bad assumptions and poor visibility
• Signals that demand and supply are chronically misaligned
• Patterns of firefighting that APS and better planning can eliminate

Use it as a quick checklist with your team to decide what to simplify and what to strengthen in your supply chain planning.