feat(example): add supply-chain-vsm composition demo (S3.5)

Demonstrates infospace composition: the Wealth of Nations infospace is
used as a discipline, applying Smith's economic framework as a lens to
analyse modern supply chain management concepts.

New example: examples/supply-chain-vsm/
- infospace.yaml binding WoN as discipline (../infospace-with-history)
- 3 source documents: coordination mechanisms, capital & inventory,
  market structure (~400 words each, original content)
- supply-chain-entity-schema-v1.0.md with WoN Concept required section
- won-mapping-schema-v1.0.md with Conceptual Continuity rating
- artifacts/won-reference/core-entities.md — 12 curated WoN entities
  for injection as discipline context
- 8 hand-crafted entity files demonstrating LLM output format
- 3 mapping files with full rationale and VSM inheritance chains
- Viable: YES (5/5 thresholds)

Key mappings demonstrated:
  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           (Moderate, S2)
  Platform Intermediary  → Merchant Capital        (Strong, S2/S4)
  Monopsony Power        → Combination of Masters  (Strong, S3*)

Platform fix: entity_parser.py now recognises ## Supply Chain Domain
as a domain alias for ## Economic Domain, enabling composed infospaces
to use their own domain section name.

Tutorial §13 rewritten with real commands, real output, and the full
mapping table from the demo.

Co-Authored-By: Claude Sonnet 4.6 <noreply@anthropic.com>
This commit is contained in:
2026-02-23 00:08:51 +01:00
parent 8f00fa2018
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27 changed files with 1696 additions and 15 deletions

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<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-22 source=coordination-mechanisms -->
# 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.

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# 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.

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# 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.

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# 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.

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# 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.

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# 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.

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# 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.

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# 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.