117 lines
4 KiB
Markdown
117 lines
4 KiB
Markdown
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# WoN Mappings — Coordination Mechanisms
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Generated from: `artifacts/sources/coordination-mechanisms.md`
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---
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# Bullwhip Effect → Natural Price as Central Price
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## Supply Chain Entity
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Bullwhip Effect
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## WoN Entity
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Natural Price as Central Price
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## Mapping Rationale
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Smith describes natural price as a centre of gravity around which market
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price perpetually oscillates. The bullwhip effect describes an analogous
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oscillation in supply chain order quantities around actual demand. In both
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cases, a signal (market price; order quantity) should converge to a
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reference value (natural price; true demand) through a corrective
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mechanism, but systematic distortions prevent convergence. Smith's
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mechanism is capital mobility; the bullwhip's is information transparency.
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Where Smith shows that monopoly or regulation blocks convergence, the
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bullwhip shows that information delay and batching produce the same failure
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in a nominally competitive chain.
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## Conceptual Continuity
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Moderate — The oscillation-around-equilibrium structure is shared, but
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the bullwhip's amplification mechanism (each tier adding safety buffers)
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is an information processing problem that Smith did not specifically analyse.
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His account of price oscillation focuses on capital reallocation; the
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bullwhip operates through order distortion without necessarily involving
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capital reallocation.
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## VSM Inheritance
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Bullwhip Effect inherits S2 via Natural Price as Central Price (coordination
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layer failure — the anti-oscillation mechanism is absent or impaired).
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---
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# Vendor-Managed Inventory → Division of Labour
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## Supply Chain Entity
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Vendor-Managed Inventory
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## WoN Entity
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Division of Labour
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## Mapping Rationale
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Smith argues that dividing labour so each party performs only what they
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are best equipped to do increases productivity and reduces waste. VMI
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applies this principle at the inter-firm boundary: the inventory
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replenishment function, previously split between buyer (tracking stock
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levels) and supplier (responding to batch orders), is consolidated with
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the supplier. The supplier has superior information about their own lead
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times and production capacity, and direct visibility of consumption rather
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than orders. The functional consolidation reduces the coordination friction
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at the boundary and improves signal quality — precisely the efficiency
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gains Smith predicts from specialisation.
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## Conceptual Continuity
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Strong — VMI is a direct application of division of labour at the
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inter-firm level. The boundary conditions are different (firms rather
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than workers; coordination through IT rather than supervision), but
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the mechanism — assigning a function to the party best positioned to
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perform it — is identical.
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## VSM Inheritance
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Vendor-Managed Inventory inherits S1/S2 via Division of Labour (operational
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specialisation creating a more effective coordination arrangement).
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---
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# Demand Signal → Effectual Demand
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## Supply Chain Entity
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Demand Signal
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## WoN Entity
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Effectual Demand
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## Mapping Rationale
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Smith's effectual demand — the demand of those willing and able to pay —
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is the signal that calls productive resources into action. When effectual
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demand exceeds supply, market price rises and capital is attracted; when
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it falls short, production contracts. The modern demand signal serves the
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same coordination function: it tells upstream nodes how much to produce.
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The structural difference is one of mechanism: Smith's effectual demand
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works through price as a lagged, aggregated, emergent signal; the modern
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demand signal is an explicit, real-time, granular data feed. The goal
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(synchronising production with consumption) and the failure mode (distorted
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signals cause misallocation) are shared.
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## Conceptual Continuity
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Strong — Effectual demand and the demand signal are the same coordination
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function in different technological settings. The modern version is
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Smith's concept made explicit and machine-readable.
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## VSM Inheritance
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Demand Signal inherits S2 via Effectual Demand (primary coordination
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variable regulating upstream resource allocation).
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