BUS606: Operations and Supply Chain Management

Supply chain management (SCM) has become an important management paradigm. It is to apply a total systems approach to managing the entire flow of information, materials, and services in fulfilling a customer demand. Several seminal studies have identified the problems caused by a lack of coordination, and to what extent competitive advantage can be gained from a seamless supply chain. Supply chain coordination leads to increased information flows, reduced uncertainty, and a more profitable supply chain. It has become a critical success factor for SCM and effectively improving the performance of organizations in various industries.

From an operational perspective, SCM is to effectively integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system wide cost while satisfying service requirements. In this sense, a supply chain coordination mechanism is an operational plan to coordinate the operations of individual supply chain members and improve system profit. When supply chain members are separate and independent economic entities, this action plan has to include an incentive scheme to allocate the benefits from coordination among them so as to entice their cooperation.

Information sharing between the buyer and vendor in the supply chain has been considered as useful strategies to remedy the so-called bullwhip effect (namely the fluctuation and amplification of demand from downstream to upstream of the supply chain) and to improve supply chain performance. Information exchange is a very important issue for coordinating actions of units. There has been a great deal written on SCM. We focus on coordination from the perspective of information flow that can align the objectives of individual supply chain members. The paper is arranged as follows: section 2 presents the literature review and the classification regarding operational information in supply chain; section 3 points out the essential elements for coordination of supply chain operational information; section 4 makes some concluding remarks and suggests future research directions.