Edinburgh Napier University

  We outline a new approach to the analysis of supply chains which uncovers a duality between networks as knowledge structures and networks as decision-making structures. The work incorporates a network transformation which introduces, under fairly general conditions, uncorrelated phase planes, which enable the investigation of changes in variability and network design both at a ‘global’ and ‘local’ decision-making level. The ‘mix’ chart (local phase plane) identifies the way in which two decision-makers coordinate their efforts to achieve capable solutions in environments experiencing changing variability and increasing uncertainty. The global chart (global phase plane) identifies changes in variability to the volume of trade as new markets are investigated. Typically endogenous variables (such as costs and contractual agreements between manufacturer and retailer) are associated with the local phase plane, while exogenous variables (such as pricing and promotion strategies) would be associated with the global phase plane, which maps volume of sales. Each phase plane has an efficient frontier derived from the solution of the stochastic differential equations and constraints imposed by strategic and contractual agreements.