Theory 39/Society, Computation & Engineering /Logistics
Resilience Lives at the Bottleneck
Resilience is measured in total inventory. What matters is where it sits.
Supply chain resilience is set by inventory held at the bottleneck tier rather than by total inventory, so a chain with large total stock but none at the constraint is fragile.
01The evidence
Shortages during disruptions occur at specific tiers despite high system-wide inventory, which points to placement rather than quantity.
02The tension
Models treat inventory as a buffer proportional to total, which predicts resilience from how much is held and misses the distribution.
03The mechanism
A chain's throughput is set by its slowest tier. Inventory elsewhere cannot relieve a bottleneck, because it cannot be converted into the constrained input.
That makes bottleneck inventory the determinant, and predicts resilience should track it rather than the total.
04What this is not
Those models count stock. This counts stock at the constraint.
05Predictions
- P1Resilience should track bottleneck inventory.
- P2High total with none at the constraint should fail.
- P3Placement should predict better than quantity.
06Refutation
Resilience tracking total inventory would favour the aggregate buffer.
07What it changes
It would change inventory policy.