Information Coordination in Supply Chain Systems
Read this paper. The article reviews the coordination of information in supply chains classified by information types, impact on performance, and information policies. Figure 2 presents the depth of information flow. What should an organization do with this information, given the analysis?
Introduction
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.