IEEE ENGINEERING MANAGEMENT REVIEW, VOL. 46, NO.

1, FIRST QUARTER, MARCH 2018 91

A System of Systems Approach for

Global Supply Chain Management
in the Big Data Era
—TSAN-MING CHOI
Business Division, Institute of Textiles and
Clothing, The Hong Kong Polytechnic
University, Hong Kong
IEEE DOI 10.1109/EMR.2018.2810069
Abstract—Global supply chain management (GSCM) is increasingly complex
and managers find that traditional methods fall short in adequately addressing
many associated challenges. As such, it calls for innovative managerial
measures. In this paper, we discuss how the system of systems (SoS)
approach and big data technologies can be applied to improve GSCM. We first
show that the global supply chain is an SoS and examine various principles of
the SoS approach. Then, we review various big data related technologies
which are commonly employed in global supply chain management. After that,
we propose how big data related technologies can be incorporated into the
SoS approach to enhance global supply chain operations by presenting an
example. This paper provides practitioners a new perspective on how big data
related technologies can be used for global supply chain management with an
SoS mindset.

Key words: Global supply chain management, system of systems theory,

big data, practitioners, managerial insights, action matrix

INTRODUCTION chain members are crucial yet

T
HE business world is getting more
and more globalized and proper
management of global supply chains
is a crucial topic of engineering
management. In all kinds of
industries, including products and
services, global supply chain
management (GSCM) is supported
by information technologies. For
example, in typical manufacturing
supply chains of a substantial scale,
producers have to source all around
the world for components and
materials, and produce in the
developing countries where the
labour cost is low. However, as the
global supply chain (GSC) includes
many geographically dispersed
companies, proper control and
coordination among different supply
The author would like to thank the Editor-in-
Chief Prof. J. Sarkis for his kind invitation, sup-
port, and comments for the development of this
paper. He is also grateful for the comments by
an anonymous reviewer, and his Ph.D. stu-
dents Y.-J. Cai and E. Fung on an earlier draft
of this paper. This paper is partially supported
by the grant G-YBGR offered by the Hong
Kong Polytechnic University.
challenging. Technologies such as
electronic data interchange (EDI) and
enterprise resource planning (ERP)
systems have become the “industrial
norm” for GSCM.
With the further development of
technologies, the GSC has entered
the big data era in which supply chain
members possess a massive amount
of highly unstructured data (Richey
et al., 2016). The data usually has
a high variety and requires very
speedy processing. How to maximize
the benefit of the big data, especially
for GSCM, becomes a critical issue.
Among different systems
management principles and methods
in the literature, the system of
systems theory would fit very well to
the management of GSCs owing to
their very complex, decentralized and
dynamic nature. In fact, a system of
systems (SoS) refers to a large scale
distributed system in which its
components are also complex and
independent systems themselves
(Choi, 2016). In many cases, the
92 IEEE ENGINEERING MANAGEMENT REVIEW, VOL. 46, NO. 1, FIRST QUARTER, MARCH 2018

Table 1. The Qualifying Criteria for SoS – Maier’ s Criteria

Qualifying criteria A global supply chain
Operational independence of component systems Each member of the GSC can operate independently as an independent unit.
Managerial independence of component systems Each member of the GSC is self-contained. It can manager itself and run independently.
Evolutionary development A GSC is not static. It develops continuously.
Emergent behavior A GSC achieves the functions not attainable by its individual supply chain members separately.
Geographic distribution Members of a GSC are usually located in different places.

Table 2. A Traditional System Versus an SoS

TRADITIONAL SYSTEM SYSTEM OF SYSTEMS
Component systems (called subsystems) usually have Component systems are independent operationally and managerially
limited ability and autonomy.
Centralized control is usually feasible. Centralized control is very difficult to achieve and most operations are under a
decentralized mode. Thus, no unit in the SoS can dictate and control all component
systems.
Subsytems are usually located in nearby places or in the Component systems are located in geographically dispersed locations.
same market.
The system faces less uncertainty. The system faces multiple sources of uncertainties coming from individual
component systems.
Subsystems are usually similar. Component systems are usually very different and no single measure can easily be
applicable to all of them.
The system’s structure is usually well-defined and The system’s structure is highly dynamic and evolves over time.
rather static.

component systems are stand-alone
systems and they work together to
form the SoS in order to create a new
function or achieve a certain goal
(Goroh et al., 2008; Tannahill and
Jamshidi, 2014), which resembles the
case of GSCs.
To be qualified as an SoS, the system
must satisfy some common qualifying
“principal criteria”, namely the
operational independence of
component systems, managerial
independence of component
systems, evolutionary development,
emergent behavior, and geographic
distribution. Notice that these five
criteria are commonly known as the
Maier’s criteria (Maier, 1998) and are
standard in determining if a system is
qualified as an SoS. After a quick
checking, it is obvious that a GSC is a
typical SoS because it well-satisfies
these five qualifying criteria as shown
in Table 1.
Observe that not all supply chains are
qualified to be systems of systems.
For example, a small supply chain
which only operates in a local market
is just a traditional system. In systems
engineering (Madni and Sievers,
2014), the large SoS and the
traditional small system are different
in a number of ways. Table 2 shows a
simple comparison between the two
types of systems, which are
commonly observed in practice.
As the GSC is naturally an SoS, we
can develop our operational
strategies and measures to
enhance GSCM by using many
principles in SoS, i.e., adopting
the SoS approach.
THE SOS APPROACH
In this section, we present the SoS
approach. We want to illustrate how
members of a GSC can improve
GSCM by adopting an SoS
approach.1
As we mentioned above, the SoS is
different from the traditional system in
a number of ways (see Table 2).
Thus, managing an SoS requires
different managerial mindsets and
principles. To be specific, the
following shows a list of key SoS
1. Here, the SoS approach refers to the
adoption of various SoS principles in analyzing
the problems.
principles coming from the SoS
approach2:
1. Objective: In terms of decision
making, an SoS usually cannot
achieve the globally optimal
decision for the whole SoS
(Gorod et al., 2008). As such, we
are usually satisfied by having a
satisficing (i.e., “good enough”)
optimization objective. However,
it is still challenging as individual
component systems of an SoS
have their own objectives and
incentives. In a GSC, it is hence
critical to properly align the
incentives among individual
members as much as possible to
the most important common
objective of the SoS.
2. Control: A small system can
achieve a centralized control
easily but not an SoS. In an SoS,
members are geographically
located in dispersed places and
they are usually highly different,
i.e., heterogeneous. As a result,
an SoS is so complicated and big
that it has to be decentralized
2. Notice that these five principles are
selected because they are well-established
and can be used for GSCM.
A SYSTEM OF SYSTEMS APPROACH FOR GLOBAL SUPPLY CHAIN MANAGEMENT IN THE BIG DATA ERA 93

and it is simply impossible to 5. Interfaces: It is commonly known (Tsilipanos et al., 2015). In

achieve a fully centralized control
(Rechtin, 1991; Madni and
Sievers, 2014). In this situation,
the best possible action is try to
find a way so that the
decentralized component
members will be willing to
contribute to some common
goals of the GSC SoS.
3. Structure: An SoS is dynamic in
its structure (Madni and Sievers,
2014). It is hence very important
to properly select the right supply
chain partners and related
technological applications to
ensure that smooth GSC
operations can be achieved
dynamically with respect to the
updated market states. If a GSC
member (e.g., a manufacturer) is
weak, the other members should
consider either helping it to
develop or changing members
under the triage policy in the SoS
theory (Choi and Shen, 2016).
4. Uncertainty: An SoS faces
multiple sources of uncertainty
because of its large size and
scope (Choi and Shen, 2016). In
a GSC SoS, if we consider every
geographically dispersed
member as a component system,
it alone already has to deal with a
number of uncertainties in supply
and demand. Considering all
GSC members together as an
SoS, it will be open to a high level
of risk and a lot of probable
disruptions because of
uncertainties. This calls for
proper risk management
schemes in the GSC to deal with
them.
in the SoS literature that the
interfaces between component
systems are critical areas (Madni
and Sievers, 2014; Choi, 2016).
A failure to properly manage
these interfaces will lead to SoS
integration failures and result in
severe losses. In GSCM, the
interfaces are usually supported
by technologies and business
process integrations, and special
attention should be paid to them.
Table 3 summarizes the critical
principles of adopting the SoS
approach for GSCM.
BIG DATA RELATED
TECHNOLOGIES FOR GSCM
To support the implementation of the
SoS approach for GSCM, we need
the use of information technology. In
fact, big data related technologies,
mainly related to sensors, storage,
processing and networks
technologies, play a crucial role in
modern GSCM. In the following, we
examine a few representative related
technological advances and
applications.
1. Information and communication
technology (ICT): ICT focuses on
the integration of communication
networks, software and hardware
so as to achieve a unified
communication scheme to
facilitate the access, storage,
transmission and manipulation of
data. It is the major driving force
for the recent economic
development in recent decades
GSCM, ICT is critical to help
improve integration and
coordination among supply chain
members. ICT also enhances
supply chain visibility and
facilitates the automation of
many business processes in
GSCs such as e-logistics and
e-procurement. In a GSC, ICT
naturally generates a lot of data
which can support GSCM.
2. Enterprise resource planning
(ERP) systems: An ERP system
is a firm-wide system which
helps support the major business
processes within the enterprise,
and provides functionality to
support connections with parties
(e.g., vendors and customers)
outside the enterprise. All ERP
systems have a centralized
database and proper data
management is crucial.
Nowadays, most well-
established enterprises should
have already implemented their
own ERP systems and
companies like SAP and Oracle
are industrial giants in providing
ERP systems solutions. In
GSCM, information integration
can be achieved by linking up the
ERP systems of individual supply
chain members. Strategic
partnerships such as vendor-
managed inventory (VMI) and
collaborative planning,
forecasting and replenishment
(CPFR) can also be achieved in
the presence of the ERP
systems.
3. Cloud computing: Information
systems and software

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
applications tools, including
storage services, are commonly
available on the cloud. In many
cases, they are called “services”.
For example, we have cloud
platform as a service (PaaS), and
cloud infrastructure as a service
(IaaS). GSCM definitely is
facilitated by cloud computing
because supply chain members,
located in geographically
different places, can all subscribe
to the same cloud services and
use the same (or compatible)
systems solution. It is well-known
that many ERP systems,
logistics management systems
(LMS), and EDI platforms have
moved to the cloud.
Undoubtedly, a massive amount
of data is available from the cloud
which can improve GSC
operations.
4. Internet of Things (IoTs): In a
GSC, there are lots of business
processes and products. IoTs
can help to establish the virtual
linkage among them so that the
critical parts are all connected by
devices. As a consequence, a
large amount of data will be
available which yields a high
degree of supply chain visibility.
This not only improves supply
chain operations, but also allows
members of the GSC to more
clearly define their own duties so
that the supply chain is under
good control. As a remark, recent
terminologies related to big data
analytics such as Industry 4.0
and Internet Plus (a term used in
China) are all related to IoTs.
5. Social media: It is known that
consumers in the market are very
powerful in the big data era. They
can group together via the social
media (such as Facebook and
Twitter) to voice out their
complaints and even boycott
brands or products they dislike.
On the other hand, if a supply
chain provides the needed
information to help consumers to
recognize the merits of the
IEEE ENGINEERING MANAGEMENT REVIEW, VOL. 46, NO. 1, FIRST QUARTER, MARCH 2018
companies or products (e.g., the
level of sustainability, the high
ethical standard, etc), consumers
will also share the good news on
social media. Thus, GSC
members can make use of the
big data collected from social
media to improve their
operations (Choi, 2017).
From the above technological
applications, members of the global
supply chain will have acquired a lot
of huge datasets which would require
proper analytical methods to “digest”
them and gain insights to support
managerial decision making. This
calls for “big data analytics” which is a
hot industrial term (Choi et al., 2017).
Big data analytics can be
implemented by different strategies
using different models. For example,
there are methods which aim to
decompose the big datasets into
smaller datasets and process them in
parallel (called “divide and conquer”
strategy). Alternatively, there are also
methods which conduct data filtering
and sampling from the big data which
avoids the need of making use of all
data points (because some data
points are redundant or very difficult
to use). To implement these
strategies for big data analytics, the
commonly used techniques (which
are not mutually exclusive) include
clustering, data mining, statistics,
fuzzy logic, optimization, evolutionary
computation, Bayesian networks,
machine learning, etc. As this paper
does not aim to focus on examining
the details of these techniques,
interested readers can check for more
from the excellent reviews by Chen
and Zhang (2014), and Wang and He
(2016).
With the proper big data analytics
methods, we can effectively process
the massive amount of data collected
from ICT, ERP systems, cloud
services, IoTs and social media to
improve GSC visibility and support
decision making in operations
management.
USING TECHNOLOGIES AND THE
SOS APPROACH TO IMPROVE
GSCM
In this section, we explore how big
data technologies and the SoS
approach can be combined to
enhance GSCM. To make the points
more specific, we present an example
on risk management in GSCs.
For risk management (Narasimhan
and Talluri, 2009; Choi and Lambert,
2017), we focus on the processes
such as risk monitoring, risk
identification, risk assessment, risk
analysis and methods to deal with risk
(Goroh et al., 2008). We construct
Fig. 1 which shows how different big
data related technologies can play a
role in implementing the SoS
approach to achieve proper risk
management in the GSC. Notice that
each cell in Fig. 1 shows the
proposed action to take with respect
to the specific technology item and
principle under the SoS approach.
This is hence a very specific action
matrix to assist managers in
employing the big data related
technologies to improve decision
making in the GSC SoS.
Observe that the action matrix we
proposed in Fig. 1 is scalable.
Managers can expand or shrink it with
respect to their own practices and
technology adoption. For example,
they may add new technologies to the
matrices by adding a column. They
may also remove an SoS principle by
removing a row if they find that it is
unimportant to their own GSCs.
CONCLUSION & FUTURE
RESEARCH
In this paper, we have explored
how the SoS approach can be
applied to improve GSCM with the
use of big data related technologies.
We have revealed that the GSC is a
well-qualified SoS by using the
Maier’s criteria. We have explored
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
help to improve GSCM. We have also
examined various critical big data
related and commonly seen
technologies and explained how they
may be used for GSCM. We have
demonstrated how big data related
technologies can be incorporated into
the SoS approach to enhance GSCM
with a specific example on GSC risk
management. An action matrix, which
is flexible and scalable with respect to
the real world situation, has also been
developed. It provides managers and
practitioners quick guidance on how
big data related technologies can be
used for GSCM using an SoS
approach.
In addition to providing guidance to
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
use of SoS and big data for GSCM.
For example, one can develop new
action matrices for other important
areas such as green GSCM (Sarkis,
2003; Wilting and van Oorschot,
2017), project management (Bierwolf,
2016; Bierwolf, 2017) in GSCs, etc.
One can also implement the
proposed actions and study the
corresponding performance in the
real world. Tannahill and Jamshidi
(2014), Haimes et al., (2015) and
Tsilipanos et al., (2015) are good
references for the technical analysis
in this future research extension.

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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.