The complexity of providing timely and cost-effective distribution of finished goods from industrial facilities to customers makes effective operational coordination difficult, yet effectiveness is crucial for maintaining customer service levels and sustaining a business. Logistics planning becomes increasingly complex with growing numbers of customers, varied geographical locations, the uncertainty of future orders, and sometimes extreme competitive pressure to reduce inventory costs. Linear optimization methods become cumbersome or intractable due to the large number of variables and nonlinear dependencies involved. Here, we develop a complex systems approach to optimizing logistics networks based upon dimensional reduction methods and apply our approach to a case study of a manufacturing company. In order to characterize the complexity in customer behavior, we define a “customer space” in which individual customer behavior is described by only the two most relevant dimensions: the distance to production facilities over current transportation routes and the customer’s demand frequency. These dimensions provide essential insight into the domain of effective strategies for customers. We then identify the optimal delivery strategy for each customer by constructing a detailed model of costs of transportation and temporary storage in a set of specified external warehouses. In addition, using customer logistics and the k-means algorithm, we propose additional warehouse locations. For the case study, our method forecasts 10.5% savings on yearly transportation costs and an additional 4.6% savings with three new warehouses.

Like other social systems, corporations comprise networks of individuals that share information and create interdependencies among their actions. The properties of these networks are crucial to a corporation’s success. Understanding how individuals self-organize into teams and how this relates to performance is a challenge for managers and management software developers looking for ways to enhance corporate tasks. In this paper, we analyze functional and social communication networks from industrial production plants and relate their properties to performance. We use internal management software data that reveal aspects of functional and social communications among workers. We found that distinct features of functional and social communication networks emerge. The former are asymmetrical, and the latter are segregated by job title, i.e., executives, managers, supervisors, and operators. We show that performance is negatively correlated with the volume of functional communications but positively correlated with the density of the emerging communication networks. Exposing social dynamics in the workplace matters given the increasing digitization and automation of corporate tasks and managerial processes.