Location of Production Activity Cells in the Space-of-Flows and the Space-of-Places

In the paper we shall demonstrate that the combination of MRP Theory – as developed by Grubbström, extended later in the research group of MEDIFAS to the modern theory of supply chain risk management – and Lowry-like models embedded in production functions of activity cells in the supply networks enables the mathematical formalization of Castells’ concept known as “reconceptualization of new forms of spatial arrangements under the new technological paradigm”, based on Ruggie’s work on “Problematizing Modernity in International Relations” and Arrighi’s further study of interactions between spatial entities and non-territorial global economic space, i.e. a space-of-flows. Here the idea of the functional region as a unit in the space-of-places is considered. In each spatial unit special consideration needs to be directed towards the regulation of three elements which should be observable and controllable: labour, land and money. The aim is to construct a model which enables regional authorities and managers of global supply chains to analyse interactions, regulate the space-of-flows, support decisions in the space-of-places and forecast the interactions between the space-of-flows and the space-of-places, but especially to evaluate the impact of supply chain perturbations regarding ICT development and policies in the space-of-places. Here the net present value (NPV) of all activities in a global supply chain is the criterion function. Therefore, the paper shows that a more permanent study of interactions between the supply chain flows (flow of items, information and financial flows) and land use in the space-of-places could support a more sustainable economic growth, while ICT makes it more successful.