Value network modeling

 

The concepts illustrated above can be used to model a wide variety of things in life, both physical and digital. Examples include:

• A CPU processing instructions and moving data from/to registers
• A network forwarding packets between compute nodes from/to memory or disk
• An energy grid transporting power from producers to consumers, transforming between energy forms along the way
• A team of people producing a deliverable
• An eco-system of companies exchanging value and tangible products
• A blogger writing an article and posting it on the Internet for others to read
• A human being eating a burger, processing the food and producing output

A process is a repetitive, predictable sequence of events (cycle) that takes certain inputs and produces certain outputs. Transport takes these inputs/outputs to another physical location (space), and storage exists to bridge the difference between the moment items are produced, and the moment (time) they are consumed. Abstraction adds a 3rd structural dimension, to summarize a set of underlying processes, transport and storage elements as a higher level process with inputs and outputs.

These mental constructs can help us to understand and communicate about what we perceive, and how things are related. It can model a desired goal or outcome, and specifies the constraints and parameters that can be changed/influenced or optimized to achieve a more harmonious system.

Constraint model

The model is constrained by the cycle time of input processes, and the limited capacity of transport connections and storage facilities. In some cases, this cycle time can be regulated ( e.g. reduce a temperature to slow down a chemical reaction, close a valve to reduce the flow of oil ). In other cases, the cycle time is given (e.g. earth revolves around the sun in a year) and items (sunlight) produced are "lost" (from the perspective of the model) in case of insufficient transport or storage capacity.

Lean six sigma and over-production

Lean six sigma is a process optimization methodology which focuses on just-in-time manufacturing and avoidance of waste. In some cases, the storage of items produced implies waste - and there is risk and cost associated with that. For example, if energy demand is low and oil needs to be stored in tanks before being converted into electricity.

Concerns are different for physical flows like oil, electricity or money, versus digital/virtual items like data - the latter can be copied electronically.

Digital circuits and organizational designs

Most digital circuits are synchronous, meaning there is a central clock signal that is transported as an input to various sub-circuits. The logic path with the longest propagation delay - the critical path - determines the maximum achievable clock frequency. Compared to asynchronous circuits, synchronous circuits are considered easier to design. Asynchronous circuits are more energy efficient and faster, as no time is wasted waiting idly for the end of the current cycle. They are also less predictable - differences in processing time for different inputs are visible in the timing of the outputs, unlike synchronous circuits where the clock "hides" such differences.

In organizational designs, synchronous circuits correspond to a top-down hierarchical structure in which instructions are given by senior management or a central team; employees then execute these instructions. In contrast, flat organizations with autonomous teams operate more like asynchronous circuits: faster and more efficient, but less predictable/stable and more difficult to implement correctly.

Human synchronous circuits

In a way, humans working in a particular time zone are synchronized by the sun and their daily circadian rhythm. At a global level, similar patterns can be observed.