79 lines
2.7 KiB
Markdown
79 lines
2.7 KiB
Markdown
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# WoN Mappings — Capital and Inventory
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Generated from: `artifacts/sources/capital-and-inventory.md`
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---
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# Just-in-Time Inventory → Circulating Capital
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## Supply Chain Entity
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Just-in-Time Inventory
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## WoN Entity
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Circulating Capital
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## Mapping Rationale
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Smith defines circulating capital as the component of capital consumed
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each productive cycle that yields its return only by changing hands —
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contrasted with fixed capital (durable plant and equipment). He argues
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that the faster circulating capital turns over, the more productive output
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can be generated from a given capital stock. JIT inventory management is
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an explicit strategy to maximise the velocity of the circulating capital
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cycle by minimising the time capital spends frozen as inventory. The
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financial logic is identical: reduce dwell time, increase velocity,
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extract more productive output per unit of capital employed.
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## Conceptual Continuity
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Strong — JIT is Smith's circulating capital theory operationalised as an
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inventory management practice. The mechanism (faster turnover of working
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capital) and the goal (higher productive output per unit of capital) are
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the same; only the technological form differs.
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## VSM Inheritance
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Just-in-Time Inventory inherits S1/S3 via Circulating Capital (operational
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resource; managed for return velocity through S3 capital management policy).
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---
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# Safety Stock → Accumulation of Stock
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## Supply Chain Entity
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Safety Stock
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## WoN Entity
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Accumulation of Stock
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## Mapping Rationale
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Smith describes stock accumulation as a prerequisite for economic activity:
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before workers can be employed in specialised production, the employer must
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have accumulated sufficient stock to sustain them while production is
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in progress — before any output can be sold. Safety stock is a modern
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instantiation of this logic: productive continuity requires holding a
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buffer of stock to absorb demand and supply variability, just as Smith's
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producer needed reserves before specialising. Both forms of stock are
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held not for immediate productive use but as insurance against disruption
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to continuous operations. The trade-off Smith identifies — between
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accumulating stock and deploying it productively — is exactly the safety
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stock optimisation problem.
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## Conceptual Continuity
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Moderate — The reserve function is shared, but Smith's accumulation of
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stock is primarily an enabling condition for production while safety stock
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is an operational buffer. The temporal purpose differs (enabling new
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activity vs. maintaining existing activity), though the economic logic
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(idle capital as insurance against continuity risk) is the same.
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## VSM Inheritance
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Safety Stock inherits S3 via Accumulation of Stock (capital management
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decision about how much reserve to hold against operational risk).
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