An Exploratory Look at Supply Chains in Japan from Multiscale Network Perspectives

Abstract

In social network analysis, advances in social networking and computing techniques have increasingly become a popular approach for extracting features and rules of real-world networks. The network language—$G=\{V, E \}$ provides a common representation of various networks, where G, V, and E denote the system, components, and interactions, respectively. In this study, we employ this emerging technique to discuss supply chains in Japan. We construct the supply network (i.e., system) based on the firms (i.e., components) and their transactional relationships (i.e., interactions). In comparison with the traditional approaches of industrial sectors and regional clusters, this study represents an exploratory look at supply networks, and investigates different scales of supply networks from three perspectives. (1) In the macro-scale perspective, we evaluate the “small-world” separation of supply networks using average path length. (2) In the meso-scale perspective, we detect communities of the supply networks, which can be marked for cross-location and cross-industry features. (3) In the micro-scale perspective, we investigate the “scale-free” nature of supply networks and each community using node degree-prior connections, which can find “hub” firms and simultaneously estimate the robustness of supply networks using a sequential elimination choice strategy of these hubs.