I was thinking something more abstract.
Like:
opposing alignment = -1 supply line
one or more enemy cities between you and nearest neutral road = -1 supply line
No roads at all = -1 supply line
On a continent with no friendly cities = -1 supply line
Inside a Dungeon = -1 supply line
Army consisting of 75% (or more) Undead troops/Demons = -1 supply line
Nearby Friendly Fortress(or Keep) = +1 supply line
Nearby Road connected to Friendly City = +1 supply line
In your own territory = +1 supply line
Friendly Dragon in army = +1 supply line
Sovereign in army = +1 supply line
Behind Friendly Walls = +1 supply line
All units that are not Sovereign, Dragon, Undead, Demon, or Champion will be affected by Supply lines. This means those units not affected by supply lines are not effected positively or Negatively. A 1HP troop can never be more than 2 HP from access to supply lines. However a 5 HP troop can become a 10 HP troop with proper supply line access, (as well as a 1 HP troop far away from home).
However, assuming only 6 factors both positive and negative, the highest factor is 7 HP being reduced to 1 HP and 6 HP being upgraded to 12 HP ... those are the HP numbers for highest degree of affected-ness. Increase your HP beyond 7, and offensive penalties start to matter less (as well as making cheap 1 HP troops). Increase your HP beyond 6 and defensive stacks start to matter less.
This highly affected Mid-HP range allows for two things. One, it allows for a tendency to make masses of crappy 1 HP troops and a central core of Massive-HP troops. Also, only 4 of each direction are "normal" conditions. So in "normal" situations, the actual Critical Mass is at 5 HP and 4 HP respectively, however the presence of a Sovereign will change this to -3 and +5, making the true critical mass 4 HP on attack and 5 HP on defense. A little less extreme, but If you DONT have a sovereign or Dragon, use mostly Undead or Demonic troops, and are exploring inside a Dungeon far behind enemy lines ... then it is expected that your regular troops will suffer.
Assume the beggining of the game, where no one is friends, and everyone has only one city. Fighting inside your own city/ defending your own city gives you a +4. Fighting anywhere else in your territory gives you a +2 (if you have the Sovereign). See ... it makes the multipliers affect armies where it matters.
If you Don't have the Sovereign, and are invading another continent, you are going to have between a -2 and -4 modifier.
If you DO have a sovereign, and are invading a nation of the same alignment, you are likely going to have a neutral modifier for attacking their first city (if your on the same continent) .... this, to me, states that the system is fair. If you beeline for their capital, then you are going to have -1 or -2 if you have your sovereign with you, otherwise it would be a -2 or -3. Meanwhile, if they are inside their city, with their sovereign, they would have a +5 (assuming they are connected to another one of their cities).
Now, currently they have a +5 and you have a -2. Thats still a 7 space gap between attacker and defender. If, however, you took their outlying cities first, and Beseige them so that they are no longer connected to their other cities ... YOU are now connected to YOUR new outposts, giving you a modifier of +2 (or +1) compared to their modifier of +4. It makes sense that they have the Advantage as its THEIR capital, although there is a Split of 2 (or 3) rather than a split of 7. This advantage is given to you because you attacked their outlying cities first, and build an "abstracted" supply line to your troops.
I would REALLY, REALLY like something like this implemented. That is, an abstrated (yet still somewhat detailed) system for weakening troops Out of Place and strengthening troops in defensive positions FROM THE POINT OF LOGISTICAL VALUE ALONE. The defenders would also be aided by walls and such in the normal function on the Tactical Map. But their troops would be stronger/ more valorious on a full stomach.
Meanwhile, High uses of Undead cause your army to have low morale and become fearful, reducing their effectivness. Same goes for exploring Dungeons ... normal units simply don't have the discipline of champions (usually) and they are in a strange and foreign environment. This makes them uncomfortable, scared, they barely have peace of mind for secured flanks since anything could pop out of the side of a dungeon (superstitious commoners in a Fantasy world is very common, even in the real world) thus making them less effective.
If the Dev Team simply copied and paste-ed my 12 points theorem and coded it into the game, I would be satisfied. Also, if they decide to change the way in which the 12 point system is implemented, change the number of points, change what affects the points (for instance add spells to affect it temporarily), and change what the points affect (movement speed/% of health as opposed to + or - HP points) ... I would also be satisfied.
If supply lines are not added at all, that is fine too, although I think this current level of Abstraction fits my vision of Elemental PERFECTLY ... so please forgive me if I find it rather brilliant, as it might not integrate well with your current plans.