Information sharing in a transparent supply chain with transportation disruptions and supplier competition

Abstract

Currently, highly complex supply networks are vulnerable to various kinds of disruptions, which may greatly affect the operational efficiency of supply chains. This calls for the development of management approaches to build a resilient supply chain under disruptions. In this work, we are mainly interested in transportation disruptions that affect shipments along a supply chain and study the decision problem of suppliers in regards to acquiring and sharing transportation disruption information in a competitive setting. In particular, we investigate a two-echelon supply chain consisting of one buyer and two competing suppliers where the buyer places an order for a single product with the two suppliers. During the product transportation process, a disruption may occur and damage the shipments in transit. In the face of such a transportation disruption, each supplier can either have its shipment inspected and reveal information to the buyer or continue without taking any action. We study this problem by formulating it as a non-cooperative game and derive equilibrium results for the two suppliers on whether or not to share information considering competition. We find that the timing and severity of the transportation disruption affect a supplier's decision on whether to acquire and share private information. By adopting an incentive mechanism, the buyer can raise the probability that a supplier shares its information, which could eventually enhance the performance of the disrupted supply chain. The supplier in a stronger market position usually acts passively towards the disruption, while the competing supplier tends to use information sharing as a way to win market share from its competitor. In addition, a sensitivity analysis is conducted on some important parameters of our model to show the impact of information sharing on supply chain performance.

COVID-19 pandemic related supply chain studies: A systematic review

“…A recent review ( Duong and Chong, 2020 ) identified seven collaboration practices that were used by commercial supply chains for responding and recovering from supply chain disruptions: (i) contractual and economics practices; (ii) joint practices; (iii) relationship management; (iv) technological and information sharing practices; (v) governance practices; (vi) assessment practices; and (vii) supply chain design (integrated operations). The necessity of ensuring visibility in supply chains through gathering, processing, and sharing information among the partners is highlighted in the disruption management literature ( Messina et al, 2020 , Tao et al, 2020 ). Having timely information about second-tier suppliers from immediate suppliers is also important for disruption management ( Yoon et al, 2020 ).…”

“…Other redundancy strategies typically considered for disruption management include inventory or capacity buffers, backup suppliers, flexibility strategies such as dual or multiple sourcing, and product and process flexibility ( Albertzeth et al, 2020 , Choi, 2020b , Gaur et al, 2020 , Ivanov et al, 2017 ). While redundancy strategies are suggested more frequently than flexible strategies ( Ivanov et al, 2017 ), the latter is applicable across various types of supply chains ( Gaur et al, 2020 , Tao et al, 2020 ). For example, flexibility in the procurement plan by considering sourcing, pricing, consumption, and delivery pattern is effective for managing the impacts of disruption in cruise ship supply chains ( Rodrigue and Wang, 2020 ).…”

On the effectiveness of supplier development programs: The role of supply-side moderators

“…Having more share of the buyer's demand is motivating for competing suppliers too, encouraging them to provide more support to ACSD and its improvement recommendations and actions, which turn to enhanced supplier performance. Ueki (2016) shows how suppliers adopt and support assessment and audit programs like ISO, when they are under pressure and may lose their market shares to competitors if they do not collaborate (Tao et al, 2020).…”

The Impact of Information Sharing on Different Performance Indicators in a Multi-Level Supply Chain

“…Trapero et al [22] investigate the impacts of retailer market sales IS on the supplier forecasting accuracy. According to the results, the supplier can improve its forecasting accuracy by obtaining sales information.Tao et al [23] focus on shipment inspection information sharing between suppliers. The transportation disruption affects a supplier's decision about sharing or no sharing information with the other supplier.…”