Emergent Behavior and SCM Introduction In this exercise, the .docx
- 1. Emergent Behavior and SCM Introduction: In this exercise, the student will analyze emergent behavior as it applies to SCM. Tasks: Read "Executive Insight in Hugos": Essentials of Supply Chain Management, answer the following questions: • Explain how negative feedback improves the performance of a supply chain. • Describe the steps that managers can take to encourage positive emergent behavior in their supply chains. • Why is emergent behavior important to continued success? 2-3 pages. APA citations. Supply chain Evolution at HP 1 Supply chain Evolution at HP 4 Module 6, Assignment 2: Supply chain Evolution at HP Scott Jackson Supply Chain Optimization and Outsourcing B6110 August 4th, 2012
- 2. For the 1992 - 1994 periods, describe and identify the supply chain that HP developed and used. Between 1992 and 1994, HP employed a different technique of analysis that involved studying the effect that improbabilities have on the functionality of the supply chain. This involved carrying out analysis for the different divisions of the company. For example, carrying out analysis for inkjet product which is situated in Corvallis; the computer manufacturing department of the company which is at Cupertino, and the LaserJet printer department which is at Boise. Through these analyses, HP achieved its objective of studying the supply chain, the various factors that affect it, and how to improve it. For instance, this analysis helped HP to realize that carrying out regular reviews is very crucial for the supply chain. It also realized that, one of the divisions, the distribution division, which is responsible for transportation of the products to the customers, needs to be boosted as a means of improving this chain (Lee & Billington, 1995). How does this supply chain support the HP strategic goals during this period? The main goals of this supply chain is to minimize the overall costs of production, to reduce the inconveniences caused by the distribution division of the supply chain through delays, and to introduce better transportation means that improve the delivery of products. With the above adopted supply chain, these strategic goals of the firm can be achieved with much ease as the processes will be more suited to achieving these goals. This is because several techniques will be applied to cause these positive changes in the supply chain. These techniques include; regularly assessing the inventory, diversifying on the transportation means to ensure efficiency in the process, and cutting down on the frequency of manufacturing (Lee & Billington, 1995). What are the strengths of this supply chain? Among the main strengths of this supply chain is that by utilizing more advanced approaches, it can lead the firm into
- 3. making several improvements in its processes such as relocation or changes in its distribution strategies, product design, manufacturing strategies and prediction of its markets; something that is in line with the firm’s goals and objectives. The flexibility of the supply chain is also strength. Generally, the ability of the supply chain to accommodate the changes that are needed to improve processes in HP is a great advantage (Lee & Billington, 1995). What are the weaknesses of this supply chain? Some of the weaknesses of this supply chain include; increase in the operational costs and expenses. Due to this, the cost is passed on to the consumer through charging high prices for the final product and therefore, it discourages the consumers. Additionally, this supply chain is time consuming, and needs a lot of additional resources to operate efficiently. Finally, as the supply chain is new, there is some level of uncertainty as the firm is not sure about its efficiency and whether it will work well for the firm (Lee & Billington, 1995). To conclude; HP’s new supply chain (1992-1994) showed some level of success. This is explained by the increase in the distribution centers, and the increase in its products. For example, the eight hundred percent increase in the number of DeskJet printers produced in 1990, and the increase in inkjet department from two hundred million dollars to more than 1.2 billion dollars over a short period of time. References Lee, H. L., & Billington, C. (1995). The Evolution of Supply- Chain-Management Models and Practice at Hewlett-Packard. Interfaces, 25(5), 42-63. Supply chain Evolution at HP - Project Part 2 Project Introduction: This course project involves an investigation into the evolution of a supply chain at Hewlett
- 4. Packard. The first part of the case describes the evolution of HP supply chain for its PC business in Europe between the years 1992 and 1994 and the different initiatives: build-to-order, vendor- managed inventory, supply hubs, top value, channel assembly program, etc. (See M6A2SC attachment) The last part deals with HP strategy of outsourcing production to SCI, a contract manufacturer. You will be asked to analyze the decisions made by Hewlett Packard and to propose a supply chain strategy that answers the question, “ what should be the next step in this highly competitive environment?” You will work on your course project throughout our term. You need to submit project reports based on the following schedule. Project Submission Plan: Description/Requirements of Project Part 2 Tasks: · Complete your analysis of this case as follows: · Complete your analysis of the HP supply chain by answering the following questions: · What supply chain models will help us grow faster? · How do we match our channel structure to customer requirements? · What supply chain structures would help us reduce costs further and at the same time help we offer greater product variety to our customers. · Use your answers in the above to guide your development of a new supply chain for HP, going forward. · Diagram and describe your new supply chain in detail. · Indicate how it meets the objectives posed by the questions above. · Indicate how it supports the strategic goals of HP. · Identify the strengths and weaknesses of each component of
- 5. your supply chain. · Provide appropriate data that is self developed, or from other sources, such as the library or the internet, to support your conclusions. 5-6 pages. APA citations. Emergent behavior is what happens when an interconnected system of relatively simple elements begins to self-organize to form a more intelligent and more adaptive higher-level system. Steven Johnson in his book, Emergence: The Connected Lives of Ants, Brains, Cities, and Software, explores the conditions that bring about this phenomenon. In an interview with Steven Johnson I posed six questions and asked him to share his insights on a range of topics. These topics range from what gives a system emergent characteristics to how could companies organize their supply chains so as to encourage and benefit from emergent behavior. · What is an “emergent system”? How is an emergent system different from an assembly line? The catchphrase that I sometimes use is that an emergent system is “smarter” than the sum of its parts. They tend to be systems made up of many interacting agents, each of which is following relatively simple rules governing its encounters with other agents. Somehow, out of all these local interactions, a higher-level, global intelligence “emerges.” The extraordinary thing about these systems is that there's no master planner or executive branch—the overall group creates the intelligence and adaptability; it's not something passed down from the leadership. An ant colony is a great example of this: colonies manage to pull off extraordinary feats of resource management and engineering and task allocation, all by following remarkably simple rules of interaction, using a simple chemical language to communicate. There's a queen ant in the colony, but she's only called that because she's the chief reproductive engine for the colony—she doesn't have any actually command authority. The ordinary ants
- 6. just do the thinking collectively, without a leader. A key difference between an emergent system and an assembly line lies in the fluidity of the emergent system: randomness is a key component of the way an ant colony will explore a given environment—take the random element out, and the colony gets much less interesting, much less capable of stumbling across new ideas. Assembly lines are all about setting fixed patterns, and eliminating randomness; emergence is all about stumbling across new patterns that work better than the old ones. · You say that such systems are “bottom up systems, not top- down.” These systems solve problems by drawing on masses of simple elements instead of relying on a single, intelligent “executive branch.” What does this mean for people who are trying to design and build emergent systems? One of the central lessons, I think, is that emergent systems are always slightly out of control. Their unpredictability is part of their charm, and their power, but it can be threatening to engineers and planners who have been trained to eliminate unpredictability at every turn. Some of the systems that I've looked at combine emergent properties and evolutionary ones: the emergent system generates lots of new configurations and ideas, and then there's a kind of natural selection that weeds out the bad ideas and encourages the good ones. That's largely what a designer of emergent systems should think about doing: it's closer to growing a garden than it is building a factory. · What does it mean when you say that emergent systems display complex adaptive behavior? The complexity refers to the number of interacting parts, like the thousands of ants in a colony, or the pedestrians on a street in a busy city. Adaptive behavior is what happens when all those component parts create useful higher-level structures or patterns of behavior with their group interactions, when they create something—usually unwittingly—that benefits the members of the group. When an ant colony determines the shortest route to a new source of food and quickly assembles a line of ants to transport the food back to the nest; when thousands of urbanites create a neighborhood
- 7. with a distinct personality that helps organize and give shape to an otherwise overwhelming city—these are examples of adaptive behavior. · What is negative feedback as opposed to positive feedback? What role does negative feedback play in the ability of a system to exhibit adaptive behavior? Negative feedback is crucial, and it's not at all negative in a value-judgment sense. Positive feedback is what we generally mean when we talk about feedback, as in the guitar effect that we first started to hear as music in the 60s: music is played through a speaker, which is picked up by a microphone, which then broadcasts it out though the speaker, creating a sound that the microphone picks up, and so on until you get a howling noise that sounds nothing like the original music. So positive feedback is a kind of self- perpetuating, additive effect: plug output A into input B which is plugged into input A. Negative feedback is what you use when you need to dampen down a chain like this, when there's a danger of a kind of runaway effect, or when you're trying to home in on a specific target. Think of a thermostat trying to reach a preset temperature: it samples the air, and if the air's too cold, it turns the heat on, then samples it again. Without negative feedback, the room would just keep getting hotter, but the thermostat has been designed to turn the heat off when the air reaches the target temperature. Ants use a comparable technique to achieve the right balance of task allocation throughout the colony: an individual ant who happens to be on foraging duty will sample the number of ants also on foraging duty that she stumbles across over the course of an hour—if she encounters a certain number, she'll switch over to another task (nest building, say) in order to keep the colony from becoming overrun with foragers. · In your book you mention a designer who has proposed building a learning network of traffic lights that will find an optimal solution to continually changing traffic conditions. You observe that, “You can conquer gridlock by making the grid itself smart.” What is it that would make the grid smart? Is this
- 8. grid an example of an emergent system? The idea proposed in the traffic model is not to take the traditional engineering, top- down approach and say: “let's look at the entire city and figure out where all the problems are, and try to design the roads and the light system to eliminate the problems.” The smart grid approach is to give each light a local perspective with a little bit of information, and give it the goal of minimizing delays at its own little corner. So the light would be able to register the number of cars stacked up at the intersection, and it would be able to experiment with different rhythms of red and green, with some feedback from its near neighbors. When it stumbles across a pattern that reduces delays, it sticks to that pattern; if the delays start piling up again, it starts experimenting again. The problem with this sort of approach is that on Day One it's a terrible, terrible system, because it doesn't yet know anything about traffic flows. (You'd have to teach it quite a bit before you could actually implement it.) But it would learn very quickly, and most importantly, it would be capable of responding to changing conditions, in a way that the traditionally engineered approach would not. That's a hallmark of adaptability. · Consider a system composed of many different companies whose goal is to provide a market with the highest levels of responsiveness at the lowest cost to themselves. High levels of responsiveness require that these companies work together to design, make, and deliver the right products at the right price at the right time in the right amounts. What are some of the things that these companies could do to organize themselves into an emergent system? There's a telltale term in supple chain systems, which may well be unavoidable—the term “chain” itself. Almost all emergent systems are networks or grids; they tend to be flatter and more horizontal, with interaction possible between all the various agents. The problem that supply chains have with positive feedback revolves around the distance between the consumer and those suppliers further down the chain—because the information has to pass through so many
- 9. intermediaries, you get distortion in the message. Most emergent systems that I've looked at have a great diversity of potential routes that information can follow; the more chain-like they become, they less adaptive they are. The other key here is experimentation: letting the system evolve new patterns of interaction on its own, since these can often be more useful and efficient than the pre-planned ones. Of course, you don't want to waste a few economic quarters experimenting with different supply chains, most of which are a disaster. But that's where some of the wonderful new modeling systems for complex behavior can be very handy: you can do the experimenting on the computer, and then pick the best solutions to implement in real life. Reference Hugos, Michael H.. Essentials of Supply Chain Management, 3rd Edition. 3. VitalSource Bookshelf. John Wiley & Sons (P&T), 2011-07-11, Sunday, August 12, 2012. <http://digitalbookshelf.argosy.edu/books/9781118279229/10/6 >