Have you ever wondered how biological systems, like our own body, can react to external stimuli or internal changes and bring all our life support variables back to normal? Think about body temperature, our natural biological system keeps it close to an average value or norm of 98.6 degrees Fahrenheit. Overheating provokes sweating and heat-loss reduces blood circulation to the skin. These are preprogrammed reactions to any change that either raises or lowers the normal temperature. Our systems automatically trigger a counteracting, opposite, or negative feedback to BALANCE our body
temperature again. This is called Homeostasis.
Homeostasis, from the Greek words for “same” and “steady,” refers to any process that living things use to actively maintain fairly stable conditions necessary for survival. The term was coined in 1930 by the physician Walter Cannon. Eventually, Homeostasis made a jump to cybernetics (from the Greek for “steersman”), defined in 1948 by the mathematician Norbert Wiener as “the entire field of control and communication theory, whether in the machine or in the animal.” Cybernetic systems can “remember” disturbances and thus are used in computer science to store and transmit information. Negative feedback is a central homeostatic and cybernetic concept, referring to how an organism or system automatically opposes any change imposed upon it.
Homeostatic reactions are inevitable and automatic if the system is functioning properly, and that a steady state or homeostasis may be maintained by many systems operating together.
I know many scholars are talking about Supply Chain resiliency at this time proposing specific preventive or corrective strategies to AVOID Supply Chain disruptions. Strategies such as:
- Multi-sourcing
- Near-shoring
- Manufacturing Network diversification
- Inventory buffers including safety stocks
- Capacity buffers
- Ecosystem partnerships
- SKU rationalization
- Business simplification
- Etc
These are very good preventive measures that are going to change Supply Chains as we knew them in pre-Covid era. My thesis today is that these strategic changes should be implemented under a completely new framework that I will call Homeostatic Supply Chain Management, that will include models that can automatically adjust Supply Chains to changes, with minimum human intervention.
The idea of traditional deterministic solutions that work under any internal or external circumstances is plain wrong. If there is something we all should have learned in the past two years is that everything in business can be highly volatile, uncertain, complex, and ambiguous. One model can’t fit it all.
Homeostatic SCM must be based on:
- End-to-End integrated business planning
- Cyber-physical systems
- Smart factories
- Horizontal and vertically integrated cloud-based system integration
- Internet of things
- Internet of people
- Integrated Digital Twins from vendor’s vendors to customer’s customers
- Virtual Engineering and R&D
- Machine learning and Artificial Intelligence
These technologies are real, actionable, and are delivering incredible improvements to global Supply Chains to the companies that are already in this path.
The main constraint for the implementation of these technologies in the real world is the lack of knowledge and experience by the industry in general. So, let’s start talking, sharing, and learning.
If you are interested in being part of this conversation about Homeostatic Supply Chains, you are welcome to join the group:
