A Diffusion Model for Communication Standards in Supply Networks

This chapter presents a simulation framework that analyzes the diffusion of communication standards in different supply networks. We show that agents’ decisions depend on potential cost reduction, pressure from members of their communication network, and implementation costs of their communication standards. Besides focusing on process-specific market power distributions, the impact of relationship stability and process connectivity are analyzed as determinants of the diffusion of communication standards within different supply network topologies. In this context, two real-world scenarios, from the automotive and paper and publishing industries, are used as examples for different network topologies. The results support the thesis that increasing relationship dynamics and process connectivity lead to decreasing competition of communication standards. In certain circumstances, local communication clusters appear along the value chain, enabling these clusters to preserve their globally inferior standardization decision.