The New Tyranny

Despite recent progress, the growing complexity of supply chain processes is still a looming threat

By Justin Kestelyn

You have to hand it to the Scandinavians: They have a unique admiration for a combination of innovation and pragmatism. And I'm not referring to Finnish mobile phones or Swedish furniture.

The Royal Swedish Academy of Sciences officially entered the information age - and made an important statement about why we're in it - with this year's Nobel Prize for Physics. The Nobel Committee's decision to award a joint prize to Jack Kilby, the inventor of the integrated circuit (Robert Noyce deserves some credit here as well), and to the team of Zhores Alferov and Herbert Kroemer, for their invention of the "heterostructure" technology on which high-speed transistors and laser diodes are based (neither your mobile phone nor CD player would work without it), suggests a characteristically pragmatic view of the technology foundation on which our information-driven culture rests. As the committee explained in its announcement, "Two simple but fundamental requirements are put on a modern information system for it to be practically useful. It must be fast, so that large volumes of information can be transferred in a short time. The user's apparatus must also be small so that there is room for it in offices, homes, briefcases or pockets." Now that's Scandinavian utilitarianism.

Smaller is Better

Jack Kilby, of course, is famed for his 1958 formulation of the so-called Monolithic Idea: that all electronic circuit components, if constructed from the same material, can operate in unison on a single chip. This elegant idea, for which Kilby was inspired while working on a vacation day in an empty Texas Instruments lab, resolved a fundamental problem with which electrical engineers had struggled since Bell Labs researchers John Bardeen, Walter Brattain, and William Shockley invented the transistor in 1947.

This problem, which was commonly described as the "Tyranny of Numbers," derived from the fact that engineers could assemble only so many circuit components in one physical space while keeping the equipment in question viable. In other words, with the technology available at the time, increasingly complex circuits became increasingly bulkier, expensive, and energy intensive. Kilby's brilliant insight was to make the components smaller and construct them of the same material (at first germanium, later silicon) so that they could form a completed circuit on a horizontal plane. The world hasn't been the same since.

New Tyrants

In a sense, a new tyranny of numbers is overshadowing information-driven organizations circa 2000. As businesses begin to adhere to the competitive tenets of a global network economy - which in part replaces mass production with mass customization - the integration and collaboration requirements of the new "demand chain" are pushing e-business models to the limits of viability.

The need to complete "integrated circuits" among suppliers, partners, internal stakeholders, and customers is an overriding challenge with which many organizations are struggling, "new economy" hype not withstanding. (The evidence here is purely anecdotal.) In fact, you could characterize the year 2000 as the period in which some new, high-level approaches to this challenge, such as e-marketplaces, started to emerge, although the requisite business-process underpinnings to make them truly viable are still lacking. For example, there is a huge amount of work to be done in supply chain collaboration infrastructure, particularly in the area of metadata interchange (although the recent merger of the MetaData Coalition and the Object Management Group is an encouraging sign) and pay-to-procure systems, which handle online billing between supply chain partners.

Until those fundamental problems are worked out, supply networks will be metaphorically more like Balkanized archipelagoes than the seamless, integrated circuits that we can print on silicon, thanks to Jack Kilby. A new tyranny of numbers will rule the day.