The impact of forecast information quality on supply chain performance

Abstract

This paper describes the extent of supplier access to customer forecast information and the perceived quality of such information. It also explains the impact of forecast information access and forecast information quality on supply chain performance. Methodology/approach: Forecast information quality is defined, and a measurement instrument is developed from theory. The analysis is based on a survey of the most important suppliers of 136 Swedish companies. Findings: Findings show that a large proportion of the suppliers receive customer forecasts, but that the forecast information quality is lower further upstream in the supply chain and, in some variables, lower for make-to-order suppliers. The greatest information quality deficiency of the forecast was that it was considered unreliable. The only significant difference in supply chain performance found between make-to-stock suppliers with and without access to forecast was related to the use of safety stock in finished goods inventory. Research limitations/implications: The study contains two types of conclusions, those developed from the conceptual discussion in the theoretical framework and those of the empirical study. In the theoretical framework, measurement instruments for forecast information quality and supply chain performance (corrective actions, preventive actions and customer service performance) were developed. The study identified several empirical relationships, but it was conducted on a samplewith large spread. Practical implications: The understanding of the performance impact of forecast information quality. Forecast information quality shows quality deficiencies on all variables, which indicates room for improvement. Originality/value of paper: Research on supply chain information quality as well as dyadic research approaches are rare.

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