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challenging. Technologies such as
HE business world is getting more electronic data interchange (EDI) and
and more globalized and proper enterprise resource planning (ERP)
management of global supply chains systems have become the “industrial
is a crucial topic of engineering norm” for GSCM.
management. In all kinds of
industries, including products and With the further development of
services, global supply chain technologies, the GSC has entered
management (GSCM) is supported the big data era in which supply chain
by information technologies. For members possess a massive amount
example, in typical manufacturing of highly unstructured data (Richey
supply chains of a substantial scale, et al., 2016). The data usually has
producers have to source all around a high variety and requires very
the world for components and speedy processing. How to maximize
materials, and produce in the the benefit of the big data, especially
developing countries where the for GSCM, becomes a critical issue.
labour cost is low. However, as the
global supply chain (GSC) includes Among different systems
many geographically dispersed management principles and methods
companies, proper control and in the literature, the system of
coordination among different supply systems theory would fit very well to
the management of GSCs owing to
The author would like to thank the Editor-in- their very complex, decentralized and
Chief Prof. J. Sarkis for his kind invitation, sup- dynamic nature. In fact, a system of
port, and comments for the development of this
paper. He is also grateful for the comments by systems (SoS) refers to a large scale
an anonymous reviewer, and his Ph.D. stu- distributed system in which its
dents Y.-J. Cai and E. Fung on an earlier draft components are also complex and
of this paper. This paper is partially supported
by the grant G-YBGR offered by the Hong independent systems themselves
Kong Polytechnic University. (Choi, 2016). In many cases, the
92 IEEE ENGINEERING MANAGEMENT REVIEW, VOL. 46, NO. 1, FIRST QUARTER, MARCH 2018
component systems are stand-alone 2014), the large SoS and the principles coming from the SoS
systems and they work together to traditional small system are different approach2:
form the SoS in order to create a new in a number of ways. Table 2 shows a 1. Objective: In terms of decision
function or achieve a certain goal simple comparison between the two making, an SoS usually cannot
(Goroh et al., 2008; Tannahill and types of systems, which are achieve the globally optimal
Jamshidi, 2014), which resembles the commonly observed in practice. decision for the whole SoS
case of GSCs. (Gorod et al., 2008). As such, we
As the GSC is naturally an SoS, we are usually satisfied by having a
To be qualified as an SoS, the system can develop our operational satisficing (i.e., “good enough”)
must satisfy some common qualifying strategies and measures to optimization objective. However,
“principal criteria”, namely the enhance GSCM by using many it is still challenging as individual
operational independence of principles in SoS, i.e., adopting component systems of an SoS
component systems, managerial the SoS approach. have their own objectives and
independence of component incentives. In a GSC, it is hence
systems, evolutionary development, critical to properly align the
THE SOS APPROACH
emergent behavior, and geographic incentives among individual
distribution. Notice that these five In this section, we present the SoS members as much as possible to
criteria are commonly known as the approach. We want to illustrate how the most important common
Maier’s criteria (Maier, 1998) and are members of a GSC can improve objective of the SoS.
standard in determining if a system is GSCM by adopting an SoS 2. Control: A small system can
qualified as an SoS. After a quick approach.1 achieve a centralized control
checking, it is obvious that a GSC is a easily but not an SoS. In an SoS,
typical SoS because it well-satisfies As we mentioned above, the SoS is members are geographically
these five qualifying criteria as shown different from the traditional system in located in dispersed places and
in Table 1. a number of ways (see Table 2). they are usually highly different,
Thus, managing an SoS requires i.e., heterogeneous. As a result,
Observe that not all supply chains are different managerial mindsets and an SoS is so complicated and big
qualified to be systems of systems. principles. To be specific, the that it has to be decentralized
For example, a small supply chain following shows a list of key SoS
which only operates in a local market
is just a traditional system. In systems 1. Here, the SoS approach refers to the 2. Notice that these five principles are
adoption of various SoS principles in analyzing selected because they are well-established
engineering (Madni and Sievers, the problems. and can be used for GSCM.
A SYSTEM OF SYSTEMS APPROACH FOR GLOBAL SUPPLY CHAIN MANAGEMENT IN THE BIG DATA ERA 93
Table 3. Critical Principles When Adopting the SOS Approach for GSCM
AREAS CRITICAL PRINCIPLES IN THE SOS APPROACH
Objective Properly aligning the incentives among individual members of the GSC to the most important SoS’ common objective is critical.
Control Finding a method so that the decentralized supply chain members will be willing to contribute to some common goals of the GSC SoS.
Structure 1. Selecting the right supply chain partners and related technological applications to support the GSC operations with respect to the
updated market states dynamically.
2. Restructuring and removing the weak link if needed.
Uncertainty The GSC SoS faces uncertainties and proper risk management schemes in the global are essential.
Interfaces Paying special attention to the interfaces between individual members in the GSC SoS.
94 IEEE ENGINEERING MANAGEMENT REVIEW, VOL. 46, NO. 1, FIRST QUARTER, MARCH 2018
applications tools, including companies or products (e.g., the USING TECHNOLOGIES AND THE
storage services, are commonly level of sustainability, the high SOS APPROACH TO IMPROVE
available on the cloud. In many ethical standard, etc), consumers GSCM
cases, they are called “services”. will also share the good news on
For example, we have cloud social media. Thus, GSC In this section, we explore how big
platform as a service (PaaS), and members can make use of the data technologies and the SoS
cloud infrastructure as a service big data collected from social approach can be combined to
(IaaS). GSCM definitely is media to improve their enhance GSCM. To make the points
facilitated by cloud computing operations (Choi, 2017). more specific, we present an example
because supply chain members, on risk management in GSCs.
located in geographically From the above technological
different places, can all subscribe applications, members of the global For risk management (Narasimhan
to the same cloud services and supply chain will have acquired a lot and Talluri, 2009; Choi and Lambert,
use the same (or compatible) of huge datasets which would require 2017), we focus on the processes
systems solution. It is well-known proper analytical methods to “digest” such as risk monitoring, risk
that many ERP systems, them and gain insights to support identification, risk assessment, risk
logistics management systems managerial decision making. This analysis and methods to deal with risk
(LMS), and EDI platforms have calls for “big data analytics” which is a (Goroh et al., 2008). We construct
moved to the cloud. hot industrial term (Choi et al., 2017). Fig. 1 which shows how different big
Undoubtedly, a massive amount Big data analytics can be data related technologies can play a
of data is available from the cloud implemented by different strategies role in implementing the SoS
which can improve GSC using different models. For example, approach to achieve proper risk
operations. there are methods which aim to management in the GSC. Notice that
4. Internet of Things (IoTs): In a decompose the big datasets into each cell in Fig. 1 shows the
GSC, there are lots of business smaller datasets and process them in proposed action to take with respect
processes and products. IoTs parallel (called “divide and conquer” to the specific technology item and
can help to establish the virtual strategy). Alternatively, there are also principle under the SoS approach.
linkage among them so that the methods which conduct data filtering This is hence a very specific action
critical parts are all connected by and sampling from the big data which matrix to assist managers in
devices. As a consequence, a avoids the need of making use of all employing the big data related
large amount of data will be data points (because some data technologies to improve decision
available which yields a high points are redundant or very difficult making in the GSC SoS.
degree of supply chain visibility. to use). To implement these
This not only improves supply strategies for big data analytics, the Observe that the action matrix we
chain operations, but also allows commonly used techniques (which proposed in Fig. 1 is scalable.
members of the GSC to more are not mutually exclusive) include Managers can expand or shrink it with
clearly define their own duties so clustering, data mining, statistics, respect to their own practices and
that the supply chain is under fuzzy logic, optimization, evolutionary technology adoption. For example,
good control. As a remark, recent computation, Bayesian networks, they may add new technologies to the
terminologies related to big data machine learning, etc. As this paper matrices by adding a column. They
analytics such as Industry 4.0 does not aim to focus on examining may also remove an SoS principle by
and Internet Plus (a term used in the details of these techniques, removing a row if they find that it is
China) are all related to IoTs. interested readers can check for more unimportant to their own GSCs.
5. Social media: It is known that from the excellent reviews by Chen
consumers in the market are very and Zhang (2014), and Wang and He CONCLUSION & FUTURE
powerful in the big data era. They (2016).
can group together via the social
RESEARCH
media (such as Facebook and With the proper big data analytics In this paper, we have explored
Twitter) to voice out their methods, we can effectively process how the SoS approach can be
complaints and even boycott the massive amount of data collected applied to improve GSCM with the
brands or products they dislike. from ICT, ERP systems, cloud use of big data related technologies.
On the other hand, if a supply services, IoTs and social media to We have revealed that the GSC is a
chain provides the needed improve GSC visibility and support well-qualified SoS by using the
information to help consumers to decision making in operations Maier’s criteria. We have explored
recognize the merits of the management. the SoS approach and identified
A SYSTEM OF SYSTEMS APPROACH FOR GLOBAL SUPPLY CHAIN MANAGEMENT IN THE BIG DATA ERA 95
Fig. 1. Action matrix for risk management in GSCs using big data and the SoS approach.
various important principles which technologies can be incorporated into practitioners quick guidance on how
help to improve GSCM. We have also the SoS approach to enhance GSCM big data related technologies can be
examined various critical big data with a specific example on GSC risk used for GSCM using an SoS
related and commonly seen management. An action matrix, which approach.
technologies and explained how they is flexible and scalable with respect to
may be used for GSCM. We have the real world situation, has also been In addition to providing guidance to
demonstrated how big data related developed. It provides managers and managers, this paper also paves a
96 IEEE ENGINEERING MANAGEMENT REVIEW, VOL. 46, NO. 1, FIRST QUARTER, MARCH 2018
new way for future research on the 2017), project management (Bierwolf, (2014), Haimes et al., (2015) and
use of SoS and big data for GSCM. 2016; Bierwolf, 2017) in GSCs, etc. Tsilipanos et al., (2015) are good
For example, one can develop new One can also implement the references for the technical analysis
action matrices for other important proposed actions and study the in this future research extension.
areas such as green GSCM (Sarkis, corresponding performance in the
2003; Wilting and van Oorschot, real world. Tannahill and Jamshidi
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Tsan-Ming Choi received the Ph.D. degree from Department of Systems Engineering and
Engineering Management, The Chinese University of Hong Kong, Hong Kong, in 2002. He is
currently a Full Professor with The Hong Kong Polytechnic University, Hong Kong. His research
interests include supply chain systems optimization and management. He has authored/edited
16 books and authored or coauthored more than 150 papers in ISI Web of Science Indexed
journals such as Automatica, Decision Sciences, Decision Support Systems, European Journal
of Operational Research, IEEE TRANSACTIONS ON AUTOMATIC CONTROL, IEEE TRANSACTIONS ON
AUTOMATION SCIENCE AND ENGINEERING, IEEE TRANSACTIONS ON CYBERNETICS, IEEE TRANSACTIONS ON
ENGINEERING MANAGEMENT, IEEE TRANSACTIONS ON INDUSTRIAL INFORMATICS, IEEE TRANSACTIONS ON
SYSTEMS, MAN, AND CYBERNETICS - SYSTEMS, INFORMS Service Science, Naval Research Logistics,
Production and Operations Management, Supply Chain Management, etc. He is currently a
Senior Editor for the Production and Operations Management, and Decision Support Systems,
an Associate Editor for the IEEE TRANSACTIONS ON SYSTEMS, MAN, AND CYBERNETICS – SYSTEMS,
INFORMATION SCIENCES, AND TRANSPORTATION RESEARCH – PART E, and an Editorial Board Member of
INFORMS Service Science, and International Journal of Production Research. He was the
recipient of The President’s Award for Excellent Achievements of The Hong Kong Polytechnic
University in 2008, and the Best Associate Editor Award of IEEE Systems, Man, and Cybernetics
Society in 2013 and 2014.