Friday, June 28, 2013

Complex Supply Networks as CAS

An interesting challenge that has been undertaken by several researchers for well over a decade now, is the modeling of Supply Networks as Complex adaptive Systems (CAS's).

One of the first to attempt the characterization of what Supply networks look like and how these charcteristics can be Modeled as CAS's, is Professor Choi at the Arizona State University in the early part of the 2000's.

Through analyses of actual supply networks, he made a series of propositions which were further scrutinized and have been improved by subsequent research: 
 Proposition 1: The greater the level of shared schema (e.g. shared work norms and procedures, shared language) among allied firms in a Supply network, the higher will be the level of fitness for each of these firms (e.g. firm performance) 
 Proposition 2:  Firms that adjust goals and infrastructure quickly, according o the changes in their customers, suppliers, and/or competitors, will survive longer in their Supply networks than firms that adhere to predetrmined, static goals and infrastructure, and are slow to change 
 Proposition 3:  Witin a Supply Network, firms that are cognizant of activities across the supply chain (including tertiary level suppliers) will be more effective at managing materials flow and technological developments, than firms that are cognizant of activities of only their immediate suppliers 
 Proposition 4:  Successful implementation of control-oriented schemes (e.g. ERP, JIT II) leads to higher efficiencies, but it may also lead to negative conbsequences such as less than expected performance improvements and reduction in innovative activities by the suppliers 
 Proposition 5:  The degree of innovation by suppliers is directly proportional o the amount of autonomy that suppliers receive in working with customers 
 Proposition 6:  Supply Networks that turn over quickly stand a better chance of exposing weak members and thus, gaining higher efficiency than supply networks that are artificially bound by long-term relationships 
 Proposition 7:  Modilarization of tasks will decreace overall inter-dependencies among firms in a supply network, and thus, offer a higher efficeincy when optimizing the overall system 
 Proposition 8:  Over time, quantum changes will last longer within a supply network than incremental changes that go against accepted practices 
 Proposition 9:  Firms that deliberately manage their supply networks by both control and emergence will outperform irms that try to manage their supply networks by either control or emergence alone 
Proposition 10:  In a supply network, upstream suppliers that are more diversified are more likely to survive than those that are not

Whether you agree or not with these statements will depend on your background and experience, but to me they resonate for their soundness and simplicity, specially for having become a first milestone in the explicit description of complex adaptive systems.

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