Consider the pencil.

Have you ever wondered what a pencil truly is, what it’s made from, and how it’s made?

It’s simple, you might think, probably one of the easiest things to make. Just put together wood, metal, rubber and graphite and – voilà – a pencil.

But, of course, it’s not that simple.

Take a closer look and account for all the necessary ingredients that make up a pencil, throw in the tools, workers, communication systems, logistics, road networks, fuel prices, factories and everything else that all need to come together across continents to put just one pencil together, and there is more to a pencil than meets the eye.

This same hidden complexity goes for most things we use, see, and touch today, and the world is only getting more complex.

The process of putting a pencil together has long been offered as an example of the importance of an open economy and of well-functioning interdependent organizations. and most importantly shows that even something as simple as a pencil can be rather more complex to produce than you might believe.

Increasing complexity

In our digital era pencils are giving way to keyboards, touchscreens, and the digital stylus. We can control our washing machines and thermostats from our smartphones and our cars can park themselves.

And that’s just the tip of the digital iceberg.

Manufacturing is undergoing a complete transformation and this means we need to look at the world – and even the pencil – differently.

In our more connected world planning is more complex, and decision making, too. A decision in one part of a supply chain can affect all other parts of that interconnected system. The cost of graphite can indeed affect the cost of producing a pencil, but how does the world’s waning interest in using a pencil affect demand down the road? And if fewer pencils are produced, how does that affect the price of a pencil’s other core materials?

How will robots, changing human resource regulations, and factory closures impact the workforce that creates a pencil today? And how will a rise in the earth’s temperature affect tree growth and the availability of wood and rubber?

When it comes to planning for the pencils we’ll produce tomorrow, the landscape is incredibly and increasingly complex. A wealth of factors must be considered and their impacts on other elements in the global supply chain, the global demand curve, and the competitiveness of pencil manufacturing in the face of digital competitors weighed and balanced.

It’s a tough job but luckily, we now have technology to help us respond to these complex challenges in the pencil industry, and beyond.

New decision management tools offer us the opportunity to understand these incredibly complex systems, to model them, and simulate the cascading effects of a single decision or constraint on every one of the system’s interconnected parts.

Today we can model how a rise in the Earth’s temperature affects the availability of wood and rubber for pencils and the subsequent impact on the price of those materials. We can model how closing factories and applying new human resource regulations or minimum wage rules in different countries affects productivity and profitability. We have the decision management tools to understand how introducing robots to the pencil manufacturing process will drive the cost of labor down but also to test whether this investment is worthwhile in a world that is increasingly digital.

While the world is certainly increasingly complex, the tools we are now developing to help us understand, predict, and respond to this complexity are increasingly powerful. Like the systems they help decision makers to negotiate, these tools are dynamic and evolving. They offer the interconnected insights required to optimize all the complex systems we encounter whether we are building a digital stylus or a pencil.

Because when even a closer look at the simplest object reveals the systemic complexity beneath, decision makers are going to need all the help they can get.

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