DARPA ULTRALOG Final Report - Industrial and Manufacturing ...

sustained oscillations. If the instability drives the system further into the nonlinear
regime, more complicated temporal behavior may be generated. The route to chaos
through subsequent period-doubling bifurcations, as certain parameters of the system are
varied, is generic to large class of systems in physics, chemistry, biology, economics and
other fields. Functioning in chaotic regime deprives the ability for long-term predictions
about the behavior of the system, while short-term predictions may be possible
sometimes. As a result, control and stabilization of such a system becomes very difficult.
• Emergent behavior and Self-Organization: With the individual entities obeying a
deterministic selection process, the organization of the overall supply chain emerges
through a natural process of order and spontaneity. This emergence of highly structured
collective behavior, over time from the interaction of the simple entities leads to
fulfillment of customer orders. Demand amplification, inventory swing are some other
but undesirable emergent phenomena that can also arise. For instance, the decisions and
delays downstream in a supply chain often leads to amplifying non-desirable effect
upstream, a phenomena commonly known as “Bull Whip” effect.
• Adaptation and Evolution: Supply chain both reacts to and creates it environment.
Generally speaking a supply chain interacts with almost every other conceivable network.
Operationally, the environment depends on the chosen scale of analysis, for e.g. it can be
taken as the customer market. Typically, significant dynamism exists in the environment
which necessitates a constant adaptation of the supply network. However the
environment is highly rugged making the co evolution difficult. The individual entities
constantly observe what emerges from a supply network and make adjustments to
organizational goals and supporting infrastructure. Another common way of adaptation is
through altering boundaries of the network. The boundaries can change as a result of
including or excluding particular entity and by adding or eliminating connections among
entities, thereby changing the underlying pattern of interaction. As we discuss next,
Supply chain management plays a critical role in making the network evolve in a
coherent manner.
3.1 Supply Chain Management
Supply chain management is defined as the integration of key business processes from endusers
through original suppliers that provide products, services, and information and add value for
customers and other stakeholders (Cooper et. al. 1997). It involves balancing reliable customer
delivery with manufacturing and inventory costs. It is evolved around a customer-focused
corporate vision, which drives changes throughout a firm’s internal and external linkages and
then captures the synergy of inter-functional, inter-organizational integration and coordination.
Due to the inherent complexity it is a challenge to coordinate the actions of entities across
organizational boundaries so that they perform in a coherent manner.
An important element in managing SCN is to control the ripple effect of lead-time so that the
variability in supply chain can be minimized. Demand forecasting is used to estimate demand for
each stage, and the inventory between stages for the network is used for protecting against
fluctuations in supply and demand across the network. Due to the decentralized control properties
of the SCN, control of ripple effect requires coordination between entities in performing their
tasks. The problem of coordination has reached another dimension due to some other trends in the
current supply chains.
Two important organizational and market trends that are on their way have been the
atomization of markets as well as that of organizational entities (Balakrishnan et al. 1999). In
such a scenario product realization process has a continuous customer involvement in all phases -
from design to delivery. Customization is not only limited to selecting from pre-determined
model variants; rather, product design, process plans, and even the supply chain configuration
have to be tailored for each customer. The product realization organization has to be formed on