Information sharing and coordination in make‐to‐order supply chains

Abstract

This research, based on our observations of an industrial vendor-manufacturer relationship, investigates the impact of information sharing and physical flow coordination in a make-to-order supply chain. We mathematically model and develop simulation-based rolling schedule procedures for analyzing the manufacturer's ordering policies, transportation activities, and the vendor's manufacturing and order fulfillment processes under five alternative integration strategies. Our objective is to measure the value of information sharing and system coordination across the strategies, identify whether the source of the benefits come from information sharing or coordination, study the allocation of system benefits among channel members, and analyze the impact of environmental factors on system cost performance. The experimental results indicate a 47.58% cost reduction moving from a traditional supply chain to a fully integrated system. While information sharing reduces costs, the main economic benefit comes from coordinated decision-making. The savings associated with system integration are not equally allocated among channel members, and vary by strategy. The procedures developed in the research provide economic insight that fosters the sharing of technological and strategic efforts. #

Examining Value Co-Creation in Healthcare Purchasing: a Supply Chain View

“…Sezen (2008) findings endorse the relevance of the practice in influencing another operational performance attribute (flexibility), especially in variable uncertain delivery and demand environments. Many other studies indicate that cooperative information sharing among SC members en hances the effectiveness and competitiveness of the SC, by enabling actors to incorporate necessary information into their work (Sahin, Robinson 2005;Li et al 2006). Studies indicated that coordinated sharing of supply and demand information with SC partners reduced cost and shortened order cycle time (Strader et al 1999), increase in informa tion sharing amidst volatile demand environment led to better SC responsiveness (Lee et al 2000) and enhanced operation, product and delivery flexibility (Sezen 2008).…”

The Influence of Information Sharing on Supply Chain Management

“…Sahin and Robinson (2005) also considered that the more complete the information sharing is, the more the cost can be reduced without inventory risks through joint planning by suppliers and manufacturers. Moreover, by following such policies collaborative planning and execution, such as the coordination of purchasing, manufacturing and product delivery, can be implemented efficiently among supply chain partners.…”

“…Through information sharing among all the partners in a supply chain, the upstream material suppliers are be able to modify their production strategies from make-to-order to make-to-stock after obtaining figures on future demand from the downstream retailers. Additionally, the suppliers' batching delivery strategies can also be formulated so that the delivery date can reduce the total cost for the downstream retailers, since it can mitigate the bullwhip effect and achieve better performance (Sahin and Robinson, 2005).…”

“…When the partners in a supply chain are willing to share their customer demand forecasts, the bullwhip effect can be reduced efficiently because the information demands are treated in an integrated fashion (Chen et al, 2000). Sahin and Robinson (2005) found that the more integrated information sharing is, the stronger the ability of joint planning between suppliers, manufacturers, logistics and retailers can be. A series of supply chain planning operations, such as production planning, inventory planning and shipment planning, should thus be initiated and communication and collaboration between business partners should also be encouraged to enhance the potential benefits of information sharing.…”

Partial Coordination May Increase Overall Costs in Supply Chains

“…Sahin and Robinson Jr. (2005) evaluated different strategies in the make-to-order environment: four with none or partial information sharing, with none or partial coordination, and one with full information sharing and full coordination. For various data parameters, i.e.…”