# WoN Mappings — Coordination Mechanisms

Generated from: `artifacts/sources/coordination-mechanisms.md`

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# Bullwhip Effect → Natural Price as Central Price

## Supply Chain Entity

Bullwhip Effect

## WoN Entity

Natural Price as Central Price

## Mapping Rationale

Smith describes natural price as a centre of gravity around which market
price perpetually oscillates. The bullwhip effect describes an analogous
oscillation in supply chain order quantities around actual demand. In both
cases, a signal (market price; order quantity) should converge to a
reference value (natural price; true demand) through a corrective
mechanism, but systematic distortions prevent convergence. Smith's
mechanism is capital mobility; the bullwhip's is information transparency.
Where Smith shows that monopoly or regulation blocks convergence, the
bullwhip shows that information delay and batching produce the same failure
in a nominally competitive chain.

## Conceptual Continuity

Moderate — The oscillation-around-equilibrium structure is shared, but
the bullwhip's amplification mechanism (each tier adding safety buffers)
is an information processing problem that Smith did not specifically analyse.
His account of price oscillation focuses on capital reallocation; the
bullwhip operates through order distortion without necessarily involving
capital reallocation.

## VSM Inheritance

Bullwhip Effect inherits S2 via Natural Price as Central Price (coordination
layer failure — the anti-oscillation mechanism is absent or impaired).

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# Vendor-Managed Inventory → Division of Labour

## Supply Chain Entity

Vendor-Managed Inventory

## WoN Entity

Division of Labour

## Mapping Rationale

Smith argues that dividing labour so each party performs only what they
are best equipped to do increases productivity and reduces waste. VMI
applies this principle at the inter-firm boundary: the inventory
replenishment function, previously split between buyer (tracking stock
levels) and supplier (responding to batch orders), is consolidated with
the supplier. The supplier has superior information about their own lead
times and production capacity, and direct visibility of consumption rather
than orders. The functional consolidation reduces the coordination friction
at the boundary and improves signal quality — precisely the efficiency
gains Smith predicts from specialisation.

## Conceptual Continuity

Strong — VMI is a direct application of division of labour at the
inter-firm level. The boundary conditions are different (firms rather
than workers; coordination through IT rather than supervision), but
the mechanism — assigning a function to the party best positioned to
perform it — is identical.

## VSM Inheritance

Vendor-Managed Inventory inherits S1/S2 via Division of Labour (operational
specialisation creating a more effective coordination arrangement).

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# Demand Signal → Effectual Demand

## Supply Chain Entity

Demand Signal

## WoN Entity

Effectual Demand

## Mapping Rationale

Smith's effectual demand — the demand of those willing and able to pay —
is the signal that calls productive resources into action. When effectual
demand exceeds supply, market price rises and capital is attracted; when
it falls short, production contracts. The modern demand signal serves the
same coordination function: it tells upstream nodes how much to produce.
The structural difference is one of mechanism: Smith's effectual demand
works through price as a lagged, aggregated, emergent signal; the modern
demand signal is an explicit, real-time, granular data feed. The goal
(synchronising production with consumption) and the failure mode (distorted
signals cause misallocation) are shared.

## Conceptual Continuity

Strong — Effectual demand and the demand signal are the same coordination
function in different technological settings. The modern version is
Smith's concept made explicit and machine-readable.

## VSM Inheritance

Demand Signal inherits S2 via Effectual Demand (primary coordination
variable regulating upstream resource allocation).
