diff --git a/examples/infospace-with-history/TUTORIAL.md b/examples/infospace-with-history/TUTORIAL.md index 358759c9..5144e44c 100644 --- a/examples/infospace-with-history/TUTORIAL.md +++ b/examples/infospace-with-history/TUTORIAL.md @@ -613,31 +613,109 @@ that are sparse in earlier books, then recovers as the matrix fills in. ## 13. Using the Infospace as a Discipline A completed, viable infospace can itself become a **discipline** — a lens -applied to a new topic. For example, the Wealth of Nations infospace could -be applied to analyse a modern supply chain. +applied to a new topic. The working example is in +`examples/supply-chain-vsm/`: it binds this WoN infospace as a discipline +and applies Smith's framework to modern supply chain management. + +### What the composition demo contains + +**8 entities** extracted from three source documents on coordination +mechanisms, capital and inventory, and market structure. Each entity +maps to a specific WoN concept with a rationale and conceptual continuity +rating (Strong / Moderate / Weak): + +| Supply Chain Entity | WoN Concept | Strength | VSM | +|---|---|---|---| +| Demand Signal | Effectual Demand | Strong | S2 | +| Vendor-Managed Inventory | Division of Labour | Strong | S1/S2 | +| Just-in-Time Inventory | Circulating Capital | Strong | S1/S3 | +| Bullwhip Effect | Natural Price as Central Price | Moderate | S2 | +| Safety Stock | Accumulation of Stock | Moderate | S3 | +| Platform Intermediary | Merchant Capital | Strong | S2/S4 | +| Monopsony Power | Combination of Masters | Strong | S3* | +| Single-Source Dependency | Monopoly in Trade | Moderate | S4/S5 | + +Because WoN entities are already mapped to VSM systems, supply chain +entities **inherit VSM positions by transitivity** — the supply chain +infospace gets VSM coverage without needing its own VSM reference. + +### Running the composition demo ```bash -# In a new infospace directory: +cd examples/supply-chain-vsm + +# Check bound disciplines and their viability: +markitect infospace disciplines +``` + +``` +Name Entities Viable Path +---------------------------------------------------------------------- +Wealth of Nations 988 YES ../infospace-with-history +``` + +```bash +# Show infospace status: +markitect infospace status +``` + +``` +Infospace: Modern Supply Chain Management +Domain: Operations Management +Entities: 8 +Disciplines: Wealth of Nations +``` + +```bash +# Run checks and review viability: +markitect infospace check +markitect infospace viability +``` + +``` +Metric Value Threshold Status +--------------------------------------------------------------- +redundancy_ratio 0.0000 max=0.1 PASS +coverage_ratio 1.0000 min=0.5 PASS +coherence_components 0.0000 max=2 PASS +consistency_cycles 0.0000 max=0 PASS +granularity_entropy 1.9056 min=0.8 PASS + +Viable: YES (5/5 thresholds met) +``` + +### Setting up your own composed infospace + +```bash +mkdir my-new-topic/ && cd my-new-topic/ + markitect infospace init \ - --topic "Modern Supply Chain Management" \ - --domain "Operations Research" \ - --discipline "Wealth of Nations" + --topic "My Topic" \ + --domain "My Domain" # Bind the WoN infospace as a discipline: -markitect infospace bind-discipline ../infospace-with-history +markitect infospace bind-discipline --name "Wealth of Nations" \ + ../infospace-with-history -# List bound disciplines and their viability: +# Confirm it is viable before using: markitect infospace disciplines -# Viable System Model PASS (from vsm-reference/) -# Wealth of Nations PASS (from ../infospace-with-history) - -# Check for stale mappings after discipline update: -markitect infospace stale-mappings ``` The discipline infospace must be viable (meeting its own thresholds) before it can be used as a lens. If the discipline's entities change, -dependent mappings are flagged for re-evaluation. +use `markitect infospace stale-mappings` to identify mappings that need +re-evaluation. + +### The WoN core entity reference + +Rather than injecting all 988 WoN entities into every prompt (which +would overflow context), the supply chain demo uses a curated reference +file at `artifacts/won-reference/core-entities.md` — 12 key WoN entities +selected for their relevance to operations and market structure. The +pipeline stage macro `@{won_core_entities}` injects this file. + +For a different topic, create an equivalent curated reference of the +WoN entities most relevant to your domain. --- diff --git a/examples/supply-chain-vsm/README.md b/examples/supply-chain-vsm/README.md new file mode 100644 index 00000000..3b2a25f9 --- /dev/null +++ b/examples/supply-chain-vsm/README.md @@ -0,0 +1,113 @@ +# Supply Chain Management through the Wealth of Nations + +A demonstration of infospace **composition**: the Wealth of Nations +infospace (from `../infospace-with-history`) is used as a **discipline**, +applying Smith's economic framework as an analytical lens to concepts in +modern supply chain management. + +This example shows that a completed, viable infospace is not just an end +in itself — it becomes reusable knowledge infrastructure for analysing +entirely different topics. + +--- + +## What This Demonstrates + +1. **Binding a discipline**: `infospace.yaml` declares the WoN infospace + as a discipline with a relative path. `markitect infospace disciplines` + shows it is viable (988 entities, all thresholds met). + +2. **Cross-domain mapping**: Each supply chain entity has a `## WoN Concept` + section mapping it to a specific WoN entity. The `output/mappings/` + directory contains structured mapping files with rationale and + conceptual continuity ratings (Strong / Moderate / Weak). + +3. **VSM inheritance**: Because WoN entities are already mapped to VSM + systems (S1–S5), supply chain entities inherit a VSM position by + transitivity through their WoN mappings — without the supply chain + infospace needing its own VSM reference. + +4. **Independent viability**: The supply chain infospace has its own + schema, thresholds, and viability check. It is viable independently + of the WoN infospace. + +--- + +## Key Mappings + +| Supply Chain Entity | WoN Concept | Strength | VSM | +|---|---|---|---| +| Demand Signal | Effectual Demand | Strong | S2 | +| Vendor-Managed Inventory | Division of Labour | Strong | S1/S2 | +| Just-in-Time Inventory | Circulating Capital | Strong | S1/S3 | +| Bullwhip Effect | Natural Price as Central Price | Moderate | S2 | +| Safety Stock | Accumulation of Stock | Moderate | S3 | +| Platform Intermediary | Merchant Capital | Strong | S2/S4 | +| Monopsony Power | Combination of Masters | Strong | S3* | +| Single-Source Dependency | Monopoly in Trade | Moderate | S4/S5 | + +--- + +## Running the Composition Commands + +```bash +cd examples/supply-chain-vsm + +# Check bound disciplines and their viability: +markitect infospace disciplines + +# Show status of this infospace: +markitect infospace status + +# Run collection checks: +markitect infospace check + +# Review viability: +markitect infospace viability +``` + +--- + +## Processing New Sources + +To process additional source documents through the pipeline: + +```bash +export OPENROUTER_API_KEY=$(cat ../../apikey-openrouter.txt | tr -d '[:space:]') + +markitect infospace process "new-source.md" --provider openrouter +``` + +The `map-to-won` stage will inject `artifacts/won-reference/core-entities.md` +as the discipline context, enabling the LLM to map new entities to WoN +concepts during extraction. + +To use the full WoN entity set as context (rather than the curated subset), +update the `map-to-won` stage macro to point at the WoN entities directory: + +```yaml +macros: + won_core_entities: ../infospace-with-history/output/entities/ +``` + +--- + +## Intellectual Payoff + +The most striking finding from this mapping exercise is how few of Smith's +concepts are genuinely obsolete. The core mechanisms he identified — +coordination signals, capital velocity, intermediary leverage, monopoly +extraction, and buyer power — all have direct modern counterparts in +supply chain management. + +What has changed is the technology: price signals are now data feeds; +merchant capital now takes the form of platform networks; the division of +labour now operates across firms (VMI) rather than within them. The +mechanisms are the same; the surface form is different. This is precisely +what Strong conceptual continuity ratings capture. + +The genuinely novel element is the elimination of inventory risk by +platform intermediaries — a structural innovation not available to Smith's +merchants, who had to bear physical stock to earn distribution profit. +This is the one place where the WoN mapping stretches to Moderate rather +than Strong. diff --git a/examples/supply-chain-vsm/artifacts/guidelines/extraction-rules.md b/examples/supply-chain-vsm/artifacts/guidelines/extraction-rules.md new file mode 100644 index 00000000..82b87e8e --- /dev/null +++ b/examples/supply-chain-vsm/artifacts/guidelines/extraction-rules.md @@ -0,0 +1,50 @@ +# Entity Extraction Rules — Supply Chain Infospace + +## What Constitutes an Entity + +Extract a concept as an entity when it is: + +1. **Named**: referred to by a consistent, recognisable label in the + source material +2. **Distinct**: meaningfully different from other entities being extracted +3. **Explanatory**: contributes to understanding how supply chains work, + fail, or could be improved +4. **Mappable**: has a plausible correspondence to at least one concept in + the Wealth of Nations reference set + +Do NOT extract: +- Proper nouns for specific companies or products (Toyota, Amazon) unless + they name a concept (e.g., the Toyota Production System is a concept) +- Historical examples unless the example itself is the concept +- Vague modifiers (e.g., "lean", "agile" as standalone adjectives) + +## Granularity Rules + +Target 4–8 entities per source document. Avoid: +- Entities so broad they subsume multiple distinct mechanisms (split them) +- Entities so narrow they are examples of a broader concept (elevate them) +- Entities that restate the same concept with different words (merge them) + +## Naming Conventions + +- Title case: `Bullwhip Effect`, not `bullwhip effect` +- Noun phrases: `Supply Chain Visibility`, not `supply chain is visible` +- Avoid acronyms in titles: `Just-in-Time Inventory`, not `JIT Inventory` + +## WoN Cross-Reference + +For each entity, consult the WoN core entity reference +(`artifacts/won-reference/core-entities.md`) to identify the most relevant +Wealth of Nations concept. Every entity should have a WoN Concept section — +even if the mapping is weak, noting the absence of a direct analogue is +informative. + +## Supply Chain Domain Assignment + +Assign the supply chain domain that best characterises the entity: + +- **Coordination**: mechanisms that synchronise activity across chain nodes +- **Capital Management**: decisions about how working capital is deployed +- **Market Structure**: competitive arrangements, power relations, platform dynamics +- **Risk**: disruption, fragility, resilience +- **Logistics**: physical movement, warehousing, last-mile diff --git a/examples/supply-chain-vsm/artifacts/guidelines/mapping-rules.md b/examples/supply-chain-vsm/artifacts/guidelines/mapping-rules.md new file mode 100644 index 00000000..13f6e544 --- /dev/null +++ b/examples/supply-chain-vsm/artifacts/guidelines/mapping-rules.md @@ -0,0 +1,60 @@ +# WoN Mapping Rules — Supply Chain Infospace + +## Purpose of Mapping + +The mapping stage asks: which Wealth of Nations concept does this supply +chain entity most directly correspond to? The goal is not to find a +superficial name match but to identify structural correspondence — same +mechanism, same trade-off, same systemic role — even when the surface form +is entirely different. + +Smith had no concept of just-in-time inventory or logistics platforms. But +he had detailed accounts of circulating capital, merchant intermediaries, +and market price oscillation. The mapping discipline asks whether modern +concepts are genuinely new structures or modern instantiations of mechanisms +Smith already described. + +## Mapping Strength Calibration + +**Strong**: The modern concept and the WoN concept are the same mechanism +in different historical settings. The supply chain entity could be used +as an example in a modern edition of Smith's chapter, with only contextual +updating needed. + +Example: Vendor-Managed Inventory is a Strong map to Division of Labour — +the function of inventory management is delegated to the party with the +greatest competence and information, which is precisely Smith's argument +for specialisation. + +**Moderate**: The concepts share structural logic but differ in important +ways — the modern concept has features Smith's lacks, or operates under +conditions Smith did not analyse. The WoN concept illuminates the modern +concept but does not fully characterise it. + +Example: Bullwhip Effect is a Moderate map to Natural Price as Central Price — +both describe oscillation of a market signal around a theoretical equilibrium, +but the bullwhip's amplification mechanism is an information distortion Smith +did not analyse in this form. + +**Weak**: The mapping is analogical — useful for analysis but the +correspondence is partial or strained. The WoN concept provides a useful +frame but should not be treated as explanatory of the modern concept. + +## One-to-Many Mappings + +A supply chain entity may map to more than one WoN concept. Where this +occurs, create a separate mapping entry for each WoN concept, explaining +the different facets each illuminates. + +## Unmappable Entities + +If no plausible WoN mapping exists (the concept is genuinely novel), +document this explicitly with a brief explanation of what Smith's framework +lacks that would be needed to capture the concept. + +## VSM Inheritance + +Every WoN entity in the reference set has a VSM system assignment. When +a supply chain entity maps to a WoN entity, it inherits that VSM position. +If the supply chain entity maps to multiple WoN entities with different VSM +assignments, note the primary inheritance and explain any secondary VSM roles. diff --git a/examples/supply-chain-vsm/artifacts/sources/capital-and-inventory.md b/examples/supply-chain-vsm/artifacts/sources/capital-and-inventory.md new file mode 100644 index 00000000..1ca566ef --- /dev/null +++ b/examples/supply-chain-vsm/artifacts/sources/capital-and-inventory.md @@ -0,0 +1,69 @@ +# Capital and Inventory in Supply Chain Management + +## Inventory as Frozen Capital + +Inventory is working capital immobilised in physical form. Every unit of +stock sitting in a warehouse represents capital that has been deployed but +not yet returned. The cash-to-cash cycle — the time between paying a +supplier and receiving payment from a customer — determines how much +working capital a business must hold at any moment. A long cycle requires +more capital; a short cycle requires less. + +This relationship makes inventory management inseparable from capital +management. Decisions about how much stock to hold, where to hold it, and +in what form are simultaneously decisions about how to deploy scarce capital. +Excess inventory does not merely incur storage costs; it has an opportunity +cost equal to the return that capital could earn in its next best use. + +## Just-in-Time Inventory + +Just-in-time (JIT) inventory management is the practice of receiving goods +from suppliers only as they are needed in the production process or for +customer fulfilment, thereby minimising the volume of inventory held at any +moment. JIT was developed in the Japanese automotive industry and achieved +its most influential form at Toyota, where it became part of the Toyota +Production System. + +The goal of JIT is to eliminate inventory as a buffer. Where traditional +manufacturing used inventory to absorb variability in supply and demand, +JIT addresses variability directly — through reliable supplier relationships, +short production runs, and rapid changeover. The capital released from +inventory reduction is the primary financial justification for the +substantial coordination investments JIT requires. + +JIT succeeds when supply chains are stable, geographically concentrated, +and have high-quality supplier relationships. It fails when exposed to +supply shocks, as the 2011 Tōhoku earthquake and the 2020–2022 global +supply chain disruptions demonstrated: the same lean buffers that minimise +capital in stable conditions amplify vulnerability in unstable ones. + +## Safety Stock and Reserve Capacity + +Safety stock is inventory held in excess of expected demand to buffer +against uncertainty. It is a form of capital deliberately kept unproductive +in order to preserve operational continuity. The optimal safety stock level +balances the cost of holding excess inventory against the cost of stockouts — +lost sales, production stoppages, and damaged customer relationships. + +The existence of safety stock reflects a fundamental trade-off in supply +chain design: capital efficiency versus operational resilience. A supply +chain optimised purely for capital efficiency holds no safety stock, but +collapses at the first supply disruption. A supply chain optimised for +resilience holds substantial safety stock, but earns a low return on +capital employed. + +## Working Capital Optimisation + +Working capital optimisation is the systematic management of the +cash-to-cash cycle to reduce the amount of capital tied up in operations +at any point. The primary levers are: reducing inventory levels (JIT, VMI), +shortening the receivables cycle (faster collection from customers), and +lengthening the payables cycle (slower payment to suppliers). + +Large buyers — particularly major retailers and platform companies — use +their market power to extend payment terms to suppliers to 60, 90, or 120 +days while collecting from customers within days. This transfers the +financing burden of working capital to the supply chain without reducing +the buyer's operational requirements. The result is an effective subsidy +from suppliers (often smaller and more capital-constrained) to buyers +(typically larger and better-capitalised). diff --git a/examples/supply-chain-vsm/artifacts/sources/coordination-mechanisms.md b/examples/supply-chain-vsm/artifacts/sources/coordination-mechanisms.md new file mode 100644 index 00000000..eaeb243d --- /dev/null +++ b/examples/supply-chain-vsm/artifacts/sources/coordination-mechanisms.md @@ -0,0 +1,63 @@ +# Coordination Mechanisms in Modern Supply Chains + +## Demand Signals and Information Flow + +Supply chains coordinate through the propagation of demand signals upstream +from end consumers through retailers, distributors, and manufacturers to raw +material suppliers. The quality and latency of these signals determine how +well production is synchronised with actual consumption. + +In a well-functioning supply chain, a retailer's point-of-sale data becomes +the input signal for a distributor's replenishment order, which in turn +signals the manufacturer to schedule production runs. When this chain +operates with full transparency and zero delay, production closely tracks +consumption. When it operates with delays, batching, or information +filtering, coordination failures emerge. + +## The Bullwhip Effect + +The bullwhip effect describes the amplification of demand variability as +signals travel upstream in a supply chain. A 5% fluctuation in retail +demand may translate into a 20% fluctuation in distributor orders and a +40% swing in manufacturer production schedules. This amplification occurs +because each node in the chain adds a safety buffer to its orders, reacts +to the previous period's signal rather than real-time data, and places +orders in discrete batches rather than continuously. + +The result is a supply chain that oscillates — periods of excess inventory +alternating with periods of shortage — even when underlying consumer demand +is relatively stable. The bullwhip effect is not a market equilibrium; it +is a coordination failure in which the absence of shared real-time +information causes each rational local decision to produce irrational +aggregate outcomes. + +## Vendor-Managed Inventory + +Vendor-managed inventory (VMI) is a coordination arrangement in which the +supplier, rather than the buyer, is responsible for maintaining stock levels +at the buyer's location. The supplier has read access to the buyer's +inventory data and automatically replenishes when stock falls below a +specified threshold. Payment occurs when the buyer consumes the goods, not +when they arrive. + +VMI represents a reallocation of the inventory management function: the +buyer surrenders operational control over a specific task (replenishment) +to the party better positioned to perform it (the supplier, who controls +the supply side). This specialisation of function reduces transaction costs, +improves forecast accuracy (the supplier sees real consumption, not +batch orders), and smooths the demand signal upstream. + +## Supply Chain Visibility + +Supply chain visibility refers to the degree to which all participants can +observe the state of inventory, orders, and shipments across the entire +chain in real time. High visibility reduces the information asymmetries +that drive the bullwhip effect and enables coordinated responses to +disruption. + +Modern visibility platforms aggregate data from tracking systems, IoT +sensors, and partner APIs to provide a unified operational picture. The +commercial value of visibility comes from reducing the cost of safety +stock (since uncertainty is lower) and enabling faster responses to supply +shocks. Visibility is not merely a technical feature; it is a coordination +mechanism that changes the incentive structure for every node in the chain. diff --git a/examples/supply-chain-vsm/artifacts/sources/market-structure.md b/examples/supply-chain-vsm/artifacts/sources/market-structure.md new file mode 100644 index 00000000..ab56c2de --- /dev/null +++ b/examples/supply-chain-vsm/artifacts/sources/market-structure.md @@ -0,0 +1,71 @@ +# Market Structure in Modern Supply Chains + +## Platform Intermediaries + +A platform intermediary in a supply chain context is a company that does +not itself produce or consume goods but instead controls the infrastructure +through which buyers and sellers transact. Platform intermediaries include +e-commerce marketplaces (Amazon, Alibaba), logistics platforms (Flexport, +FreightOS), and procurement networks (Coupa, Ariba). Their value lies not +in physical capital but in network effects: the platform becomes more +valuable to each participant as the total number of participants grows. + +Platform intermediaries extract value by charging transaction fees, selling +data analytics, providing financing, or leveraging their position to capture +margin that previously accrued to producers or carriers. Their market power +derives from control of the matching infrastructure: a seller who abandons +the platform loses access to the buyer network; a buyer who abandons the +platform loses access to the supplier network. + +Unlike traditional merchant intermediaries — who bought and sold goods, +bearing inventory risk — platform intermediaries transfer inventory risk to +the counterparties. The platform earns commission on each transaction but +holds no stock; the asymmetry concentrates profit in the intermediary while +concentrating risk in producers and carriers. + +## Monopsony and Buyer Power + +Monopsony is market power on the buyer's side: a situation in which a +single buyer (or a small number of buyers acting in concert) faces many +sellers. In supply chains, monopsony manifests when a large retailer or +manufacturer is the dominant customer for a category of suppliers. The +buyer's ability to credibly threaten to switch suppliers — or to reduce +purchase volumes — gives it negotiating leverage that suppliers cannot +easily counter. + +Buyer power is exercised through price pressure (demanding lower unit costs +in each contract renegotiation), terms pressure (extending payment terms, +imposing fines for delivery failures), and specification creep (adding +requirements without cost compensation). Suppliers facing strong buyer power +are systematically squeezed: their margins decline, their ability to invest +in quality and capacity is constrained, and their bargaining position +deteriorates further as the buyer grows. + +The long-run consequence of sustained monopsony pressure is supplier +consolidation — weaker suppliers exit, leaving the buyer with fewer but +larger suppliers — and supply fragility, as the surviving suppliers have +insufficient margin to hold safety stock or invest in resilience. + +## Market Concentration and Single-Source Dependencies + +Single-source dependency occurs when a supply chain relies on one supplier +for a critical component or material with no readily substitutable +alternative. Single-source situations arise from supplier specialisation +(only one firm has the required capability), geographic concentration (all +competent suppliers are in one region), or deliberate buyer policy (choosing +the best supplier and extracting maximum scale economies). + +Single-source dependencies concentrate supply chain risk. When a +single-sourced supplier fails — due to fire, flood, earthquake, insolvency, +or geopolitical disruption — the buyer has no immediate alternative. The +semiconductor industry exemplifies this: certain advanced logic chips can +only be produced by one or two foundries globally, making entire sectors +of the world economy dependent on the operational continuity of a small +number of facilities in Taiwan and South Korea. + +From a market structure perspective, single-source suppliers possess +temporary monopoly power: during a supply disruption, they can charge +prices far above their normal level, because no substitute exists. Smith's +analysis of monopoly price — that it is the highest that can be squeezed +from buyers — applies directly: a disrupted single-source supplier in a +critical category faces demand that is inelastic in the short run. diff --git a/examples/supply-chain-vsm/artifacts/won-reference/core-entities.md b/examples/supply-chain-vsm/artifacts/won-reference/core-entities.md new file mode 100644 index 00000000..14739a21 --- /dev/null +++ b/examples/supply-chain-vsm/artifacts/won-reference/core-entities.md @@ -0,0 +1,192 @@ +# Wealth of Nations — Core Entities Reference + +A curated selection of WoN entities from the infospace at +`../infospace-with-history/output/entities/`, chosen for their relevance +to supply chain analysis. Use these as mapping targets in the +`map-to-won` pipeline stage. + +--- + +## Division of Labour + +Slug: `division-of-labour` + +The specialisation of tasks among workers or firms, each focusing on a +narrow function to increase overall productive efficiency. Smith argues +this is the primary source of economic progress, enabled by the certainty +that surplus production can be exchanged. + +VSM: S1 (primary operational mechanism) + +--- + +## Effectual Demand + +Slug: `effectual-demand` + +The demand of those who are willing and able to pay the natural price of +a commodity. Effectual demand, not total desire, is what calls productive +resources into action. When effectual demand exceeds supply, market price +rises above natural price; when it falls short, market price falls below. + +VSM: S2 (coordination signal — regulates resource allocation) + +--- + +## Natural Price as Central Price + +Slug: `natural-price-as-central-price` + +The natural price is the centre around which market prices continually +gravitate. When the market price exceeds the natural price, capital is +attracted; when it falls below, capital exits. The natural price is thus +an equilibrium attractor that Smith likens to a centre of gravity. + +VSM: S2 (coordination signal — equilibrium reference point) + +--- + +## Market Price Adjustment Mechanism + +Slug: `market-price-adjustment-mechanism` + +The process by which market price moves toward natural price through +changes in supply. Excess supply depresses market price; scarcity raises +it. The mechanism depends on capital mobility: if capital can freely enter +and exit a sector, prices will converge to natural levels. Restrictions on +capital mobility (monopoly, regulation) prevent convergence. + +VSM: S2 (coordination mechanism — negative feedback loop) + +--- + +## Circulating Capital + +Slug: `circulating-capital` + +The component of capital that is used up in the course of a single +productive cycle and must be continually replaced. Includes raw materials, +work-in-progress, and the wages fund. Distinguished from fixed capital +(machinery, buildings) by the fact that it yields its return only by +changing hands. The speed of circulation determines how productively +a given capital stock can be employed. + +VSM: S1 / S3 (operational resource; managed for return velocity) + +--- + +## Accumulation of Stock + +Slug: `accumulation-of-stock` + +The process of building up capital reserves from savings (frugality), +enabling future investment in productive capacity. Smith argues that +capital accumulation precedes and enables division of labour — you cannot +specialise workers until you have stock to sustain them while production +is in progress. Stock functions as a buffer between production and +consumption. + +VSM: S3 (capital management — enables S1 operations) + +--- + +## Merchant Capital + +Slug: `merchant-capital` + +Capital employed by merchants who buy goods in one market and sell them in +another, earning a profit from price differentials without directly engaging +in production. Merchant capital performs the function of distribution: +connecting producers and consumers who would otherwise face prohibitive +search and transaction costs. Smith notes that merchants are mobile — they +have no necessary attachment to any particular country — and that this +mobility gives them leverage over producers and governments. + +VSM: S2 / S4 (coordination; also market intelligence function) + +--- + +## Monopoly in Trade + +Slug: `monopoly-in-trade` + +A situation in which a single seller or a privileged group of sellers +control supply in a market, enabling them to set prices above the natural +level. Smith argues monopoly prices are always the highest that can be +extracted from buyers, whereas competition drives prices toward the +natural level. Monopoly distorts resource allocation by keeping prices +high and restricting supply below what free competition would provide. + +VSM: S5 (policy distortion — violates S2 equilibrating function) + +--- + +## Combination of Masters + +Slug: `combination-of-masters` + +The coordinated action by employers to restrain wages or otherwise +improve their negotiating position relative to workers. Smith observes +that such combinations are common but rarely discussed publicly. The +practical effect is monopsony-like suppression of the returns to labour +below their natural level. + +VSM: S3* (audit / anti-competitive practice — distorts S2 signals) + +--- + +## Higgling and Bargaining of the Market + +Slug: `higgling-and-bargaining-of-the-market` + +The process of price discovery through negotiation between buyers and +sellers. Smith describes it as the mechanism by which value in exchange +is determined in practice — not by abstract calculation but by the +push-and-pull of each party pursuing their own interest, with the result +tending toward a price both can accept. + +VSM: S2 (real-time coordination mechanism) + +--- + +## Invisible Hand Mechanism + +Slug: `invisible-hand-mechanism` + +The process by which individuals pursuing their private economic interest +unintentionally produce outcomes beneficial to the whole economy. Smith +uses this metaphor specifically for domestic investment decisions: a +merchant who prefers domestic to foreign investment for security reasons +inadvertently maximises domestic productive capacity. The mechanism does +not require coordination — it is an emergent property of distributed +self-interested action under competitive conditions. + +VSM: S4 (distributed intelligence — environmental adaptation without +central direction) + +--- + +## Capital Security Preference + +Slug: `capital-security-preference` + +Smith's observation that capital owners systematically prefer less risky +applications of their capital over more risky ones, even when the expected +return might favour the riskier option. This preference shapes the +allocation of capital across sectors and geographic areas. + +VSM: S3 (capital management — explains capital allocation patterns) + +--- + +## Market Communication Channels + +Slug: `market-communication-channels` + +The mechanisms through which information about prices, quantities, and +conditions flows between market participants. Smith implicitly relies on +such channels for his account of price adjustment — if buyers and sellers +cannot learn each other's prices and terms, the equilibrating mechanism +breaks down. + +VSM: S2 (information infrastructure for coordination) diff --git a/examples/supply-chain-vsm/infospace.yaml b/examples/supply-chain-vsm/infospace.yaml new file mode 100644 index 00000000..53c72bf4 --- /dev/null +++ b/examples/supply-chain-vsm/infospace.yaml @@ -0,0 +1,61 @@ +# Infospace: Modern Supply Chain Management +# +# Demonstrates infospace composition: the Wealth of Nations infospace +# is used as a discipline, applying Smith's economic framework as a +# lens to analyse concepts in modern supply chain management. +# +# This shows how a completed, viable infospace becomes reusable +# as a discipline for an entirely different topic. + +topic: + name: "Modern Supply Chain Management" + domain: "Operations Management" + sources: artifacts/sources/ + +disciplines: + - name: "Wealth of Nations" + path: ../infospace-with-history + +schemas: + entity: schemas/supply-chain-entity-schema-v1.0.md + mapping: schemas/won-mapping-schema-v1.0.md + +competency_questions: | + 1. Which supply chain coordination mechanisms correspond to Smith's S2 price signals? + 2. How does the bullwhip effect relate to Smith's theory of market price oscillation? + 3. Where do modern platform intermediaries fit in Smith's analysis of merchant capital? + 4. How does just-in-time inventory management reflect Smith's treatment of circulating capital? + 5. Which supply chain dysfunctions parallel the market distortions Smith identified? + 6. Can modern supply chain management be read as a viable system through WoN concepts? + +viability: + redundancy_ratio: + max: 0.10 + coverage_ratio: + min: 0.50 + coherence_components: + max: 2 + consistency_cycles: + max: 0 + granularity_entropy: + min: 0.8 + +pipeline: + stages: + - name: extract-entities + template: templates/extract-entities.md + output_dir: output/entities + output_macro: entities + split_entities: true + max_tokens: 6000 + macros: + extraction_rules: artifacts/guidelines/extraction-rules.md + won_core_entities: artifacts/won-reference/core-entities.md + - name: map-to-won + template: templates/map-to-won.md + output_dir: output/mappings + output_macro: mappings + max_tokens: 8000 + macros: + mapping_rules: artifacts/guidelines/mapping-rules.md + won_core_entities: artifacts/won-reference/core-entities.md diff --git a/examples/supply-chain-vsm/output/entities/bullwhip-effect.md b/examples/supply-chain-vsm/output/entities/bullwhip-effect.md new file mode 100644 index 00000000..c3fc2c14 --- /dev/null +++ b/examples/supply-chain-vsm/output/entities/bullwhip-effect.md @@ -0,0 +1,35 @@ + + +# Bullwhip Effect + +## Definition + +The amplification of demand variability as signals travel upstream in a +supply chain, such that small fluctuations at the retail level produce +progressively larger swings in orders at distributor, manufacturer, and +supplier levels. The amplification arises from batching, safety stock +additions at each tier, and the use of lagged signals rather than +real-time demand data. The result is a chain that oscillates between glut +and shortage even when end-consumer demand is relatively stable. + +## Source + +Coordination Mechanisms in Modern Supply Chains, §The Bullwhip Effect + +## Supply Chain Domain + +Coordination + +## VSM Assignment + +S2 — The bullwhip effect is a failure of S2 (the anti-oscillation +coordination layer). A functioning S2 dampens variance; the bullwhip +effect describes what happens when S2 is absent or degraded. + +## WoN Concept + +Natural Price as Central Price — Smith describes market price as oscillating +around natural price as a centre of gravity. The bullwhip effect is an +analogous oscillation: orders oscillate around actual demand rather than +converging to it, because the information infrastructure required for +convergence (transparent, real-time demand signals) is missing. diff --git a/examples/supply-chain-vsm/output/entities/demand-signal.md b/examples/supply-chain-vsm/output/entities/demand-signal.md new file mode 100644 index 00000000..d52f86df --- /dev/null +++ b/examples/supply-chain-vsm/output/entities/demand-signal.md @@ -0,0 +1,39 @@ + + +# Demand Signal + +## Definition + +Information about consumer purchasing activity that propagates upstream +through a supply chain to inform supplier replenishment and production +decisions. A demand signal may be a point-of-sale data feed, a retailer's +replenishment order, or a forecast. Signal quality — latency, accuracy, +and granularity — determines how well upstream production can be +synchronised with downstream consumption. + +## Source + +Coordination Mechanisms in Modern Supply Chains, §Demand Signals and +Information Flow + +## Supply Chain Domain + +Coordination + +## VSM Assignment + +S2 — The demand signal is the primary coordination variable of the supply +chain, analogous to the price signal in a market. It tells each upstream +node what the downstream node requires, enabling synchronised response +without central direction. + +## WoN Concept + +Effectual Demand — Smith's effectual demand — the demand of those willing +and able to pay — is the signal that calls productive resources into action. +The modern demand signal is effectual demand made explicit and machine-readable: +instead of inferring demand from price movements, modern supply chains +transmit demand data directly. Both serve the same coordination function +(telling producers how much to produce), but where Smith's effectual demand +works through price as a lagged, aggregated signal, the modern demand signal +aims for real-time, granular transmission. diff --git a/examples/supply-chain-vsm/output/entities/just-in-time-inventory.md b/examples/supply-chain-vsm/output/entities/just-in-time-inventory.md new file mode 100644 index 00000000..68825c44 --- /dev/null +++ b/examples/supply-chain-vsm/output/entities/just-in-time-inventory.md @@ -0,0 +1,36 @@ + + +# Just-in-Time Inventory + +## Definition + +A capital management practice in which goods are received from suppliers +only as they are needed for production or fulfilment, minimising the +stock held at any moment. JIT eliminates inventory as a buffer by +replacing it with reliable process coordination — synchronised production +schedules, short lead times, and high-frequency deliveries. The capital +released from inventory reduction is the primary financial justification. + +## Source + +Capital and Inventory in Supply Chain Management, §Just-in-Time Inventory + +## Supply Chain Domain + +Capital Management + +## VSM Assignment + +S3 — JIT is a management-level decision about how to deploy circulating +capital. It sets the policy for inventory levels (near-zero) and enforces +that policy through supplier relationship design and production scheduling. + +## WoN Concept + +Circulating Capital — Smith distinguishes circulating capital (consumed +and replaced each productive cycle) from fixed capital (durable). JIT is +an explicit strategy to minimise the circulating capital locked in +inventory at any moment, accelerating the velocity of the capital cycle. +The faster capital circulates, the greater the productive output per unit +of capital stock — precisely Smith's argument for keeping circulating +capital in motion rather than idle. diff --git a/examples/supply-chain-vsm/output/entities/monopsony-power.md b/examples/supply-chain-vsm/output/entities/monopsony-power.md new file mode 100644 index 00000000..ff0635d8 --- /dev/null +++ b/examples/supply-chain-vsm/output/entities/monopsony-power.md @@ -0,0 +1,40 @@ + + +# Monopsony Power + +## Definition + +Market power held by a dominant buyer who faces many sellers, enabling +the buyer to suppress prices, extend payment terms, and impose conditions +below what competitive markets would support. In supply chains, monopsony +is exercised by large retailers or manufacturers who represent a significant +fraction of a supplier's revenue, giving them leverage to dictate terms +the supplier cannot credibly refuse. The long-run consequence is supplier +margin compression, underinvestment in quality, and supply fragility. + +## Source + +Market Structure in Modern Supply Chains, §Monopsony and Buyer Power + +## Supply Chain Domain + +Market Structure + +## VSM Assignment + +S3* — Monopsony power is exercised through the management control layer: +buyers set terms (pricing, payment, specification) that govern the +operational relationship. The S3* (audit/control) analogy holds because +the buyer uses its inspection and approval rights to enforce compliance +with terms extracted through buyer power. + +## WoN Concept + +Combination of Masters — Smith describes the combination of masters as the +coordinated exercise of employer power to suppress wages below their +competitive level. Monopsony power in modern supply chains operates through +the same mechanism: a concentrated buyer (or buyers acting in parallel) +systematically extracts value from fragmented suppliers, just as Smith's +combination of masters extracted value from fragmented workers. The parallel +is structural: in both cases, one side of the market is coordinated and the +other is atomistic, enabling systematic suppression of returns. diff --git a/examples/supply-chain-vsm/output/entities/platform-intermediary.md b/examples/supply-chain-vsm/output/entities/platform-intermediary.md new file mode 100644 index 00000000..a0ef1cb1 --- /dev/null +++ b/examples/supply-chain-vsm/output/entities/platform-intermediary.md @@ -0,0 +1,50 @@ + + +# Platform Intermediary + +## Definition + +A company that controls the infrastructure through which supply chain +participants transact, without itself producing or consuming goods. Platform +intermediaries earn revenue from network access fees, transaction commissions, +data analytics, and financing services. Their market power derives from +network effects: value accrues to participants proportionally to the size +of the network, creating winner-take-most dynamics. Unlike traditional +intermediaries, platforms bear no inventory risk — that remains with +producers and carriers. + +## Source + +Market Structure in Modern Supply Chains, §Platform Intermediaries + +## Supply Chain Domain + +Market Structure + +## VSM Assignment + +S4 — Platform intermediaries function as the intelligence layer of the +supply chain, aggregating and intermediating market information across many +buyers and sellers simultaneously. They are not operational (S1) but shape +what operations are possible and at what price. + +## WoN Concept + +Merchant Capital — Smith's analysis of merchant capital — capital employed +to buy in one market and sell in another, earning profit from differential +access — maps closely to platform intermediaries. Both earn profit not +from production but from controlling access to exchange. Smith noted that +merchants are geographically mobile and have no necessary loyalty to any +particular productive system, giving them structural leverage over producers +who are fixed. Platform intermediaries exhibit the same dynamic at +unprecedented scale: the platform has no physical attachment, yet producers +who exit lose access to the entire buyer network. + +## Modern Context + +Platform intermediaries represent a structural innovation Smith could not +have anticipated: they capture the coordination function of merchant capital +while eliminating its inventory risk and capital requirements. The result is +a higher-leverage, lower-capital form of intermediation than Smith described, +but the underlying logic — control of the exchange infrastructure creates +extractable surplus — is precisely what he analysed. diff --git a/examples/supply-chain-vsm/output/entities/safety-stock.md b/examples/supply-chain-vsm/output/entities/safety-stock.md new file mode 100644 index 00000000..7eb233ac --- /dev/null +++ b/examples/supply-chain-vsm/output/entities/safety-stock.md @@ -0,0 +1,38 @@ + + +# Safety Stock + +## Definition + +Inventory held in excess of expected demand to buffer against supply and +demand uncertainty. Safety stock represents capital deliberately kept +unproductive — not expected to be consumed in normal operations — in order +to preserve operational continuity when actual demand or supply deviates +from forecast. The optimal safety stock level balances inventory holding +cost against stockout cost. + +## Source + +Capital and Inventory in Supply Chain Management, §Safety Stock and Reserve +Capacity + +## Supply Chain Domain + +Capital Management + +## VSM Assignment + +S3 — Safety stock is a management-level capital allocation decision. The +question of how much safety stock to hold is a resource management choice +that trades off capital efficiency against operational resilience, made at +the S3 (management/control) level. + +## WoN Concept + +Accumulation of Stock — Smith describes the accumulation of stock as a +prerequisite for productive activity: you cannot employ workers until you +have stock to sustain them. Safety stock is a modern instantiation of this +logic — productive continuity requires a buffer of stock to absorb +variability, just as Smith's pre-capitalist household needed a reserve before +it could specialise its labour. Both represent capital held in reserve against +contingency rather than deployed in production. diff --git a/examples/supply-chain-vsm/output/entities/single-source-dependency.md b/examples/supply-chain-vsm/output/entities/single-source-dependency.md new file mode 100644 index 00000000..3f74c2c6 --- /dev/null +++ b/examples/supply-chain-vsm/output/entities/single-source-dependency.md @@ -0,0 +1,41 @@ + + +# Single-Source Dependency + +## Definition + +A supply chain condition in which a buyer relies on one supplier for a +critical component or material with no readily substitutable alternative. +Single-source situations arise from supplier specialisation, geographic +concentration of competent producers, or deliberate buyer policy +maximising scale economies with a preferred partner. During disruptions, +a single-sourced supplier in a critical category temporarily possesses +monopoly-like pricing power, as the buyer has no alternative and demand +is inelastic in the short run. + +## Source + +Market Structure in Modern Supply Chains, §Market Concentration and +Single-Source Dependencies + +## Supply Chain Domain + +Risk + +## VSM Assignment + +S4 — Single-source dependency is an intelligence failure at the S4 level: +the supply chain's environmental scanning has not identified and mitigated +the concentration risk. Resolving it requires S4 action — supplier +development, geographic diversification, or technology substitution. + +## WoN Concept + +Monopoly in Trade — Smith argues that monopolists charge the highest price +buyers will bear, and that this price is always above the competitive level. +A single-source supplier during a supply disruption is a temporary +monopolist: buyers cannot immediately switch, demand is inelastic, and the +supplier can extract above-normal prices. Smith's analysis of how monopoly +restricts supply and raises price applies directly to the disrupted +single-source scenario, even though in normal conditions the same supplier +may operate competitively. diff --git a/examples/supply-chain-vsm/output/entities/vendor-managed-inventory.md b/examples/supply-chain-vsm/output/entities/vendor-managed-inventory.md new file mode 100644 index 00000000..4eea02ed --- /dev/null +++ b/examples/supply-chain-vsm/output/entities/vendor-managed-inventory.md @@ -0,0 +1,38 @@ + + +# Vendor-Managed Inventory + +## Definition + +A supply chain coordination arrangement in which the supplier takes +responsibility for maintaining stock levels at the buyer's location, +using shared inventory data to trigger automatic replenishment. Payment +occurs at point of consumption rather than delivery. The buyer surrenders +operational control over replenishment in exchange for reduced +administrative burden and improved demand signal quality. + +## Source + +Coordination Mechanisms in Modern Supply Chains, §Vendor-Managed Inventory + +## Supply Chain Domain + +Coordination + +## VSM Assignment + +S2 — VMI is a formal coordination mechanism that assigns the replenishment +function to the party best positioned to perform it. It reduces oscillation +(the bullwhip) by giving the upstream party direct visibility of +consumption rather than batched orders. + +## WoN Concept + +Division of Labour — VMI is an application of Smith's division of labour +principle at the inter-firm level. The inventory management function — +previously split between buyer (demand tracking) and supplier (order +fulfilment) with coordination friction between them — is consolidated +with the supplier, who has the information and capability to perform it +most efficiently. The functional specialisation reduces transaction costs +and improves the quality of the upstream demand signal, mirroring Smith's +argument that specialisation improves output quality and reduces waste. diff --git a/examples/supply-chain-vsm/output/mappings/capital-and-inventory-mappings.md b/examples/supply-chain-vsm/output/mappings/capital-and-inventory-mappings.md new file mode 100644 index 00000000..9e357f0c --- /dev/null +++ b/examples/supply-chain-vsm/output/mappings/capital-and-inventory-mappings.md @@ -0,0 +1,78 @@ +# WoN Mappings — Capital and Inventory + +Generated from: `artifacts/sources/capital-and-inventory.md` + +--- + +# Just-in-Time Inventory → Circulating Capital + +## Supply Chain Entity + +Just-in-Time Inventory + +## WoN Entity + +Circulating Capital + +## Mapping Rationale + +Smith defines circulating capital as the component of capital consumed +each productive cycle that yields its return only by changing hands — +contrasted with fixed capital (durable plant and equipment). He argues +that the faster circulating capital turns over, the more productive output +can be generated from a given capital stock. JIT inventory management is +an explicit strategy to maximise the velocity of the circulating capital +cycle by minimising the time capital spends frozen as inventory. The +financial logic is identical: reduce dwell time, increase velocity, +extract more productive output per unit of capital employed. + +## Conceptual Continuity + +Strong — JIT is Smith's circulating capital theory operationalised as an +inventory management practice. The mechanism (faster turnover of working +capital) and the goal (higher productive output per unit of capital) are +the same; only the technological form differs. + +## VSM Inheritance + +Just-in-Time Inventory inherits S1/S3 via Circulating Capital (operational +resource; managed for return velocity through S3 capital management policy). + +--- + +# Safety Stock → Accumulation of Stock + +## Supply Chain Entity + +Safety Stock + +## WoN Entity + +Accumulation of Stock + +## Mapping Rationale + +Smith describes stock accumulation as a prerequisite for economic activity: +before workers can be employed in specialised production, the employer must +have accumulated sufficient stock to sustain them while production is +in progress — before any output can be sold. Safety stock is a modern +instantiation of this logic: productive continuity requires holding a +buffer of stock to absorb demand and supply variability, just as Smith's +producer needed reserves before specialising. Both forms of stock are +held not for immediate productive use but as insurance against disruption +to continuous operations. The trade-off Smith identifies — between +accumulating stock and deploying it productively — is exactly the safety +stock optimisation problem. + +## Conceptual Continuity + +Moderate — The reserve function is shared, but Smith's accumulation of +stock is primarily an enabling condition for production while safety stock +is an operational buffer. The temporal purpose differs (enabling new +activity vs. maintaining existing activity), though the economic logic +(idle capital as insurance against continuity risk) is the same. + +## VSM Inheritance + +Safety Stock inherits S3 via Accumulation of Stock (capital management +decision about how much reserve to hold against operational risk). diff --git a/examples/supply-chain-vsm/output/mappings/coordination-mechanisms-mappings.md b/examples/supply-chain-vsm/output/mappings/coordination-mechanisms-mappings.md new file mode 100644 index 00000000..9040fca9 --- /dev/null +++ b/examples/supply-chain-vsm/output/mappings/coordination-mechanisms-mappings.md @@ -0,0 +1,116 @@ +# WoN Mappings — Coordination Mechanisms + +Generated from: `artifacts/sources/coordination-mechanisms.md` + +--- + +# Bullwhip Effect → Natural Price as Central Price + +## Supply Chain Entity + +Bullwhip Effect + +## WoN Entity + +Natural Price as Central Price + +## Mapping Rationale + +Smith describes natural price as a centre of gravity around which market +price perpetually oscillates. The bullwhip effect describes an analogous +oscillation in supply chain order quantities around actual demand. In both +cases, a signal (market price; order quantity) should converge to a +reference value (natural price; true demand) through a corrective +mechanism, but systematic distortions prevent convergence. Smith's +mechanism is capital mobility; the bullwhip's is information transparency. +Where Smith shows that monopoly or regulation blocks convergence, the +bullwhip shows that information delay and batching produce the same failure +in a nominally competitive chain. + +## Conceptual Continuity + +Moderate — The oscillation-around-equilibrium structure is shared, but +the bullwhip's amplification mechanism (each tier adding safety buffers) +is an information processing problem that Smith did not specifically analyse. +His account of price oscillation focuses on capital reallocation; the +bullwhip operates through order distortion without necessarily involving +capital reallocation. + +## VSM Inheritance + +Bullwhip Effect inherits S2 via Natural Price as Central Price (coordination +layer failure — the anti-oscillation mechanism is absent or impaired). + +--- + +# Vendor-Managed Inventory → Division of Labour + +## Supply Chain Entity + +Vendor-Managed Inventory + +## WoN Entity + +Division of Labour + +## Mapping Rationale + +Smith argues that dividing labour so each party performs only what they +are best equipped to do increases productivity and reduces waste. VMI +applies this principle at the inter-firm boundary: the inventory +replenishment function, previously split between buyer (tracking stock +levels) and supplier (responding to batch orders), is consolidated with +the supplier. The supplier has superior information about their own lead +times and production capacity, and direct visibility of consumption rather +than orders. The functional consolidation reduces the coordination friction +at the boundary and improves signal quality — precisely the efficiency +gains Smith predicts from specialisation. + +## Conceptual Continuity + +Strong — VMI is a direct application of division of labour at the +inter-firm level. The boundary conditions are different (firms rather +than workers; coordination through IT rather than supervision), but +the mechanism — assigning a function to the party best positioned to +perform it — is identical. + +## VSM Inheritance + +Vendor-Managed Inventory inherits S1/S2 via Division of Labour (operational +specialisation creating a more effective coordination arrangement). + +--- + +# Demand Signal → Effectual Demand + +## Supply Chain Entity + +Demand Signal + +## WoN Entity + +Effectual Demand + +## Mapping Rationale + +Smith's effectual demand — the demand of those willing and able to pay — +is the signal that calls productive resources into action. When effectual +demand exceeds supply, market price rises and capital is attracted; when +it falls short, production contracts. The modern demand signal serves the +same coordination function: it tells upstream nodes how much to produce. +The structural difference is one of mechanism: Smith's effectual demand +works through price as a lagged, aggregated, emergent signal; the modern +demand signal is an explicit, real-time, granular data feed. The goal +(synchronising production with consumption) and the failure mode (distorted +signals cause misallocation) are shared. + +## Conceptual Continuity + +Strong — Effectual demand and the demand signal are the same coordination +function in different technological settings. The modern version is +Smith's concept made explicit and machine-readable. + +## VSM Inheritance + +Demand Signal inherits S2 via Effectual Demand (primary coordination +variable regulating upstream resource allocation). diff --git a/examples/supply-chain-vsm/output/mappings/market-structure-mappings.md b/examples/supply-chain-vsm/output/mappings/market-structure-mappings.md new file mode 100644 index 00000000..542d1314 --- /dev/null +++ b/examples/supply-chain-vsm/output/mappings/market-structure-mappings.md @@ -0,0 +1,126 @@ +# WoN Mappings — Market Structure + +Generated from: `artifacts/sources/market-structure.md` + +--- + +# Platform Intermediary → Merchant Capital + +## Supply Chain Entity + +Platform Intermediary + +## WoN Entity + +Merchant Capital + +## Mapping Rationale + +Smith analyses merchant capital as capital employed to buy in one market +and sell in another, earning profit from controlling access to exchange +rather than from production. He notes that merchants are mobile — they +have no necessary attachment to any productive system — which gives them +structural leverage over producers who are geographically fixed. Platform +intermediaries are a high-leverage form of the same structure: they control +access to exchange (the matching infrastructure) without bearing inventory +risk, earning profit from transaction fees and data rather than from +buying and reselling. The merchant's physical mobility translates into +the platform's structural mobility — the platform has no fixed attachment +to any producer's fate, yet producers cannot exit without losing network +access. + +## Conceptual Continuity + +Strong — Platform intermediaries are the modern form of merchant capital: +the mechanism (control of exchange access, leverage over producers, +profit from intermediation rather than production) is identical. The +innovation is eliminating inventory risk while retaining coordination +power, which makes platforms a more concentrated and profitable form of +merchant capital than Smith could have envisioned. + +## VSM Inheritance + +Platform Intermediary inherits S2/S4 via Merchant Capital (coordination +infrastructure with intelligence function — aggregating market data while +intermediating transactions). + +--- + +# Monopsony Power → Combination of Masters + +## Supply Chain Entity + +Monopsony Power + +## WoN Entity + +Combination of Masters + +## Mapping Rationale + +Smith describes the combination of masters as the coordinated exercise of +employer power to suppress wages below the competitive level. He notes +these combinations are common, rarely discussed publicly, and facilitated +by the smaller number of employers relative to workers. Modern supply chain +monopsony operates through the same structural mechanism: a concentrated +buyer (or industry norm among buyers) facing atomistic suppliers +systematically extracts terms — lower prices, extended payment, cost +absorption — that suppliers cannot individually refuse without losing the +customer. The power asymmetry (concentrated vs. atomistic; each party's +outside options) is identical. Smith's analysis predicts the modern +outcome: margin compression, underinvestment, and fragility on the supplier +side. + +## Conceptual Continuity + +Strong — Monopsony power in supply chains is Smith's combination of masters +applied to the buyer–supplier relationship rather than the employer–worker +relationship. The market structure (concentrated power facing fragmented +supply of a factor) and the mechanism (systematic extraction below +competitive returns) are the same. + +## VSM Inheritance + +Monopsony Power inherits S3* via Combination of Masters (distortion of +the S2 coordination signal through coordinated anti-competitive behaviour +at the management boundary). + +--- + +# Single-Source Dependency → Monopoly in Trade + +## Supply Chain Entity + +Single-Source Dependency + +## WoN Entity + +Monopoly in Trade + +## Mapping Rationale + +Smith argues that monopolists always charge the highest price buyers will +bear, because no competitive alternative disciplines them. A single-source +supplier during a supply disruption is a temporary monopolist: the buyer +has no immediate alternative, demand for the component is inelastic in +the short run, and the supplier can extract above-natural prices. Smith's +account of monopoly — restricted supply, elevated price, distorted resource +allocation — applies precisely to the disrupted single-source scenario. +The difference is that single-source dependency produces episodic monopoly +power (during disruptions) rather than Smith's continuous monopoly; but +the mechanism and the welfare consequences are the same. + +## Conceptual Continuity + +Moderate — The monopoly pricing mechanism is shared, but Smith's monopoly +is a stable market structure while single-source dependency produces +temporary monopoly only during disruptions. The strategic implications +also differ: Smith focuses on restricting supply to maintain high prices, +while single-source power is an inadvertent consequence of concentrated +specialisation rather than deliberate supply restriction. + +## VSM Inheritance + +Single-Source Dependency inherits S4/S5 via Monopoly in Trade (intelligence +failure creating conditions for policy-level market distortion when +disruption occurs). diff --git a/examples/supply-chain-vsm/output/metrics/history.yaml b/examples/supply-chain-vsm/output/metrics/history.yaml new file mode 100644 index 00000000..3cadc933 --- /dev/null +++ b/examples/supply-chain-vsm/output/metrics/history.yaml @@ -0,0 +1,52 @@ +- snapshot_id: 8624eed1 + created_at: '2026-02-22T22:56:11.424102+00:00' + schema_name: default + entity_count: 8 + entity_evaluations: [] + collection_metrics: + - name: coherence_components + value: 0.0 + concern: C3 + - name: consistency_cycles + value: 0.0 + concern: C4 + - name: coverage_ratio + value: 1.0 + concern: C2 + - name: granularity_entropy + value: 0.0 + concern: C5 + - name: modularity + value: 0.0 + concern: C3 + - name: redundancy_ratio + value: 0.0 + concern: C1 + metadata: + source: collection-checks +- snapshot_id: '89119325' + created_at: '2026-02-22T23:07:36.634661+00:00' + schema_name: default + entity_count: 8 + entity_evaluations: [] + collection_metrics: + - name: coherence_components + value: 0.0 + concern: C3 + - name: consistency_cycles + value: 0.0 + concern: C4 + - name: coverage_ratio + value: 1.0 + concern: C2 + - name: granularity_entropy + value: 1.9056390622295665 + concern: C5 + - name: modularity + value: 0.0 + concern: C3 + - name: redundancy_ratio + value: 0.0 + concern: C1 + metadata: + source: collection-checks diff --git a/examples/supply-chain-vsm/output/metrics/metrics.yaml b/examples/supply-chain-vsm/output/metrics/metrics.yaml new file mode 100644 index 00000000..04dac332 --- /dev/null +++ b/examples/supply-chain-vsm/output/metrics/metrics.yaml @@ -0,0 +1,6 @@ +coherence_components: 0.0 +consistency_cycles: 0.0 +coverage_ratio: 1.0 +granularity_entropy: 1.905639 +modularity: 0.0 +redundancy_ratio: 0.0 diff --git a/examples/supply-chain-vsm/schemas/supply-chain-entity-schema-v1.0.md b/examples/supply-chain-vsm/schemas/supply-chain-entity-schema-v1.0.md new file mode 100644 index 00000000..d457d085 --- /dev/null +++ b/examples/supply-chain-vsm/schemas/supply-chain-entity-schema-v1.0.md @@ -0,0 +1,59 @@ +# Supply Chain Entity Schema v1.0 + +Every extracted entity must contain the following sections in this order. + +## Required Sections + +### H1 Heading + +The entity name in title case. Should be a noun phrase identifying a +distinct concept, mechanism, or structure in supply chain management. + +Example: `# Bullwhip Effect` + +### Definition + +20–150 words. Precise, non-circular definition of the concept. Must +identify what it is, not just what it does. Avoid defining a term +using the term itself. + +### Source + +The source document this entity was extracted from, citing section +if available. Format: `[Source Name], [Section]` + +### Supply Chain Domain + +One of: **Coordination**, **Capital Management**, **Market Structure**, +**Risk**, **Logistics** + +### VSM Assignment + +One of: S1, S2, S3, S3*, S4, S5 — which layer of the Viable System Model +this entity primarily inhabits. Brief rationale (one sentence). + +### WoN Concept + +The Wealth of Nations concept this entity most directly corresponds to. +State the WoN entity name and a one-sentence explanation of the connection. +If no direct correspondence exists, state "No direct WoN analogue" and +explain why. + +## Optional Sections + +### Modern Context + +Additional notes on how the concept has evolved since Smith's time, or +how it differs from its classical form. + +## Quality Metrics + +Evaluation rubric for per-entity LLM assessment: + +- **Definition Precision** (1–5): Is the definition specific, non-circular, + and distinguishable from adjacent concepts? +- **Source Grounding** (1–5): Is the entity grounded in the source material? +- **Domain Placement** (1–5): Is the supply chain domain assignment correct? +- **WoN Relevance** (1–5): Is the WoN mapping substantive and well-reasoned? +- **Explanatory Value** (1–5): Does this entity contribute to understanding + modern supply chains through the WoN lens? diff --git a/examples/supply-chain-vsm/schemas/won-mapping-schema-v1.0.md b/examples/supply-chain-vsm/schemas/won-mapping-schema-v1.0.md new file mode 100644 index 00000000..77a7adbe --- /dev/null +++ b/examples/supply-chain-vsm/schemas/won-mapping-schema-v1.0.md @@ -0,0 +1,54 @@ +# WoN Mapping Schema v1.0 + +Every mapping from a supply chain entity to a Wealth of Nations concept +must contain the following sections. + +## Required Sections + +### H1 Heading + +Format: `Supply Chain Entity → WoN Entity` + +Example: `# Bullwhip Effect → Natural Price as Central Price` + +### Supply Chain Entity + +The supply chain entity being mapped (title case name). + +### WoN Entity + +The Wealth of Nations entity being mapped to. Must be an entity that +exists in the WoN infospace (see `artifacts/won-reference/core-entities.md` +for the curated reference set). + +### Mapping Rationale + +Minimum 40 words. Explain why this supply chain concept corresponds to +this WoN concept. Ground the mapping in both the supply chain definition +and Smith's original analysis. Do not rely on surface-level name similarity. + +### Conceptual Continuity + +One of: **Strong**, **Moderate**, **Weak** + +- **Strong**: The modern concept directly instantiates the WoN concept — + same mechanism, different technology or scale +- **Moderate**: The modern concept resembles the WoN concept in structure + but differs in important ways +- **Weak**: The mapping is analogical — useful for analysis but not a + direct correspondence + +### VSM Inheritance + +Because the WoN entity is already mapped to a VSM system in the WoN +infospace, the supply chain entity inherits a VSM position by transitivity. +State: `[Supply Chain Entity] inherits [VSM System] via [WoN Entity]` + +## Quality Metrics + +- **Rationale Rigour** (1–5): Is the mapping justified by substantive + analysis, not just surface similarity? +- **Continuity Calibration** (1–5): Is the declared strength consistent + with the rationale? +- **VSM Coherence** (1–5): Does the inherited VSM assignment make sense + for the supply chain entity? diff --git a/examples/supply-chain-vsm/templates/extract-entities.md b/examples/supply-chain-vsm/templates/extract-entities.md new file mode 100644 index 00000000..24b9bf35 --- /dev/null +++ b/examples/supply-chain-vsm/templates/extract-entities.md @@ -0,0 +1,62 @@ +# Extract Supply Chain Entities + +You are a supply chain analyst with expertise in both modern operations +management and classical political economy. Your task is to extract +distinct supply chain entities from a source document. + +## Source Document + +@{chapter_text} + +## Extraction Guidelines + +@{extraction_rules} + +## Wealth of Nations Reference Entities + +The following WoN entities are available as mapping targets. For each +entity you extract, identify the most relevant WoN concept from this set. + +@{won_core_entities} + +## Existing Entities + +The following entities have already been extracted from previous sources. +Do not re-extract concepts already captured — only extract genuinely new +entities introduced by this source. + +@{existing_entities} + +## Output Format + +Output each entity using the following delimiter format: + +``` +--- ENTITY: Entity Name --- + +# Entity Name + +## Definition + +[20–150 word definition] + +## Source + +[Source document name, section if applicable] + +## Supply Chain Domain + +[Coordination | Capital Management | Market Structure | Risk | Logistics] + +## VSM Assignment + +[S1–S5] — [one-sentence rationale] + +## WoN Concept + +[WoN entity name] — [one-sentence explanation of the connection] + +--- +``` + +Extract 4–8 entities. Prefer precision over volume. diff --git a/examples/supply-chain-vsm/templates/map-to-won.md b/examples/supply-chain-vsm/templates/map-to-won.md new file mode 100644 index 00000000..2ebb715b --- /dev/null +++ b/examples/supply-chain-vsm/templates/map-to-won.md @@ -0,0 +1,54 @@ +# Map Supply Chain Entities to Wealth of Nations Concepts + +You are analysing modern supply chain management through the lens of +Adam Smith's Wealth of Nations. For each supply chain entity, produce a +structured mapping to the most relevant WoN concept. + +## Supply Chain Entities + +@{entities} + +## WoN Reference Entities + +@{won_core_entities} + +## Mapping Guidelines + +@{mapping_rules} + +## Output Format + +For each supply chain entity, produce a mapping using the following +delimiter format: + +``` +--- MAPPING: Supply Chain Entity → WoN Entity --- + +# Supply Chain Entity → WoN Entity + +## Supply Chain Entity + +[Entity name] + +## WoN Entity + +[WoN entity name from the reference set] + +## Mapping Rationale + +[Minimum 40 words explaining the structural correspondence] + +## Conceptual Continuity + +[Strong | Moderate | Weak] + +## VSM Inheritance + +[Supply Chain Entity] inherits [VSM System] via [WoN Entity] + +--- +``` + +Produce one mapping per supply chain entity. Where an entity has no +plausible WoN mapping, produce a mapping entry with WoN Entity: "No +direct analogue" and explain what is structurally novel. diff --git a/markitect/infospace/entity_parser.py b/markitect/infospace/entity_parser.py index 5780294d..4c2231b9 100644 --- a/markitect/infospace/entity_parser.py +++ b/markitect/infospace/entity_parser.py @@ -120,7 +120,7 @@ def parse_entity_file(path: Path) -> EntityMeta: definition = _get_section_text("definition") source_chapter = _get_section_text("source_chapter") context = _get_section_text("context") - domain = _get_section_text("economic_domain") + domain = _get_section_text("economic_domain") or _get_section_text("supply_chain_domain") original_wording = _get_section_text("smith_s_original_wording") modern_interpretation = _get_section_text("modern_interpretation")