How internal exchanges and schedules must work in a value network

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Recall that an operating value network is composed of processes that produce values and other processes that use or consume them.

In Value_network_recipe_design_principles, this was described as an alternation of processes and exchanges:

process1->exchange->process2->exchange->process3->etc.

In more detail, the value network goes:

process1->output value1->exchange->input value1->process2->etc, where each process can have more than one output and input, forming a network.

Or p1->o v1->x->i v1->p2->o v2->x->i v2->p3

Or in the SENSORICA context, let's say:

  • p1 = Optical fiber coating
  • p2 = Joint-type transducer
  • p3 = Mosquito scientific instrument system

So then we get:

Optical fiber coating process->coated optical fiber->exchange->coated optical fiber->Joint-type transducer process->Joint-type transducer->exchange->Joint-type transducer->etc

Inside a company, internal exchanges can operate by command-and-control. In a value network, they cannot. So a Joint-type transducer process must request the output values from an Optical fiber coating process, and the Optical fiber coating process can accept or reject the request. Or counter-offer with changes (e.g. a later time), which can then be accepted or rejected or countered by the Joint-type transducer process.

This principle will have a lot of implications, for example in recipes and process scheduling as well as resource exchanges. And we will need to deal with questions of agency that we have so far ducked.

For example, can Mosquito scientific instrument system create and change recipes for Joint-type transducer? How about Optical fiber coating? How about scheduling? Can Mosquito scientific instrument system schedule a process for Joint-type transducer, or Optical fiber coating? Certainly Mosquito scientific instrument system cannot commit resources for Joint-type transducer or Optical fiber coating; those commitments must be made by the individuals who provide the resources (especially work time). But how about the processes?

Now let's go back to the abstract processes, so as not to get hung up in the current particularities of SENSORICA.

What if the p3 and p2 belong to the same project? What if p1 belongs to a different project?

And who (what agent) is responsible for p3, and p2, and p1? In other words, who can create recipes and schedules for p3, p2 and p1? Who can commit the output resources from p1 to p2 instead of p4?

What if the same people are involved in all three processes and both projects? In that case, can one of those people create recipes and schedules and commit resources for all three processes?

Remember that one of the reasons for the formation of companies was to reduce transaction costs. A value network wants to reduce transaction costs without needing the bureaucracy and other formalities of a company.

But if each exchange between value network processes requires explicit agreement between the agents responsible for each process, those explicit agreements will introduce friction and transaction costs into the network.

Sometimes (in the case of work time contributions) that explicit commitment is necessary.

In other cases, as in recipes and processes, maybe some automatic rules can apply (as in, same project, or same agent involved in both projects and scheduling both processes, or the projects have some standing agreements about what can be done).

But is that any agent, like somebody who just logged a meeting attendance in both projects? Or does it need to be particular people who are authorized to create recipes, schedule processes and commit output resources? If so, who authorized them?


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