OR/MS Today - October 2006



Q.E.D.


Supply Chain Interoperability

By ManMohan S. Sodhi


Interoperability is the ability of products, systems or business processes to work together to accomplish a common task. The term can be defined in a technical way or in a broad way, taking into account social, political and organizational factors. [Wikipedia]

After 10 years of "Cyberspace," I am starting a new column in its stead: "Q.E.D." or quot erat demonstradum — what was to be shown. I had taken the title of my previous column, Cyberspace, from William Gibson's novel "Neuromancer." The title of the new column is closer to home for those who are familiar with the ending of proofs with Q.E.D. rather than a square black box or "tombstone" we use now. My goal with the column is not to prove anything but to show things in a different light than we are used to seeing them.

At a recent conference in July 2006 at Washington University, Yossi Aviv made a thought-provoking presentation on supply-chain interoperability as a research topic. I struggled to understand whether we had not already covered it in such topics as collaborative planning. Yet, I felt that there was something quite essential that the research literature had not covered and that Yossi was on to something.

Back on the long flight home, it finally dawned on me: Interoperability really means having well-defined processes with formal information sharing among entities that did not share much information previously. It means designing and implementing new or modified processes that encompass or replace existing processes that are relatively narrow in scope and lead to frictional losses and sub-optimization. Interoperability is a lot more than drawing flow-charts and organization charts and devising information-sharing standards: We have to think of incentives, corporate governance, controls, process charts, global optimization using mathematical models sharing information using, say, Web services and game theory.

However, isn't this exactly what supply chain management research is? We no longer speak of manufacturing separately from distribution, or manufacturing in one plant separately from that in another because doing so would be suboptimal. Instead, we use IT systems, APS software, etc. to inform processes that would optimize the total effectiveness of the planning, sourcing, manufacturing and distribution effort.

If supply chain management research is supply chain interoperability research, haven't we already covered it in the literature? In reality we have only covered mathematical modeling. We have not talked about designing and implementing processes that would use such models. In a real organization, there are people and there are processes. Why should someone use a global optimization model? Are there incentives in place? Whose forecast should the manufacturing people consider — sales or marketing or just last month's production orders? They need a process to know that.

O.R. academics have models and operations practitioners have processes. Academics and practitioners are not highly interoperable and are quite happy in their self-contained worlds. Consider a practitioner view of interoperability as reflected in the following part of the Wikipedia entry: "Currently, business process interoperability is limited to enterprise software systems in which functions are designed to work together, such as a payroll module and a general ledger module... Interoperability is also present between incompatible systems where middleware has been applied." The above entry is essentially about enterprise resource planning (ERP) and enterprise application integration (EAI), both of which were topics of Cyberspace column articles. This view makes interoperability as a topic attractive to system integrators but not as a research topic for academics.

Suppose, as an academic, you did figure out what interoperability was and wrote a paper. It would certainly involve incentives, process redesign, change management, some model or models and organization structure. Where would you publish it? After some thought, you decide to split the paper: the model and any equations you send to an academic journal and the process and change management part to a practitioner journal. Those following your research in the academic literature will specialize your model further, assuming some other conditions or relaxing your conditions somewhat. The modeling will get not only more specialized but also increasingly divorced from organizations and processes. In a few years, someone will ask the same question: Why don't we put the models, processes, systems and people together for research on interoperability? The cycle begins again.

As the Indian poet and Nobel laureate, Tagore, wrote, you cannot dissect a flower to find its scent. Breaking things apart does not help you find what exists only in the whole. To the best of my knowledge, the only scientific field that was designed to keep the whole together is O.R., but over time it has evolved. Supply chain management research also has specialized into petals, sepals, anthers, stigma and more. We are now unable to find not only the scent but also the flower.

My understanding is that O.R. is a multidisciplinary field that brings together different types of people. The academic model of specialization and promotion based on academic articles discourages this, so O.R. is now a collection of different non-intersecting topics. We need to put humpty-dumpty together again first before we start doing research on interoperability.



Mohan Sodhi (M.Sodhi@city.ac.uk) heads the Operations group at Cass Business School in London. He welcomes your comments.





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