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Supply chains consist of readily recognizable linkages, often between commercially distinct organizations that must coordinate activities to ultimately meet customer demand. Such organizations are not necessarily bound by a central planner who can both determine and dictate what procurement policies are implemented across these inter-organizational links. In the absence of such coordination, each organization can be expected to resolve procurement and replenishment policies from a local perspective, passing the demands of such to its suppliers in a highly intuitive, pull-style fashion. While such policies may seem reasonable to all partners involved and may be the only solutions tolerable from a political perspective, there exists the possibility that the decentralized policies are operating at a combined cost substantially higher than that which could be achieved through global optimization. The purpose of this chapter is to define this vulnerability and to suggest methods for anticipating it, both in the simulation modelling of supply chains and in

New Measures for Supply Chain Vulnerability: Characterizing the Issue of Friction in the Modelling and Practice of Procurement