ANALYSIS OF FACTORS AFFECTING THE BENEFITS OF DEMAND INFORMATION SHARING
Globalization increases the complexity of supply chain and companies are faced with competitive pressure and environmental uncertainties as well as increasing customer demand (Thomas & Esper, 2010). To satisfy the fluctuating customer demand and to make various players in a supply chain align with customer requirement, collaboration between the players based on the timely communication is required. Moreover, sharing important
information such as customer demand and on-hand inventory level with other players is required to coordinate the players’ activities. With respect to the inventory management, various collaborative policies such as QR (Quick Response), ECR (Efficient Customer Response), VMI (Vendor Managed Inventory) and CPFR (Collaborative Planning, Forecasting and Replenishment) have been developed so as to overcome the limitation of standalone inventory management policies. These collaborative inventory management policies are based on the sharing of customer demand information between players in the supply chain.
Jméno a příjmení autora:
Information sharing, system dynamics, simulation, bullwhip effect, collaborative inventory management
DOI (& full text):
Sharing customer demand information across the supply chain is known to be an effective approach to improve the performance of the whole supply chain. However, demand information sharing between…více
Sharing customer demand information across the supply chain is known to be an effective approach to improve the performance of the whole supply chain. However, demand information sharing between companies requires a large amount of budget and leads to a change in the work proces within the organization. Therefore, it is necessary to verify whether the sharing of customer demand information is beneficial to the company or not by considering their business environment. This paper aims to analyze the benefits of demand information sharing between companies in various business environments in order to provide managerial implications for the companies considering the adoption of a collaborative inventory management policy with external companies. This research uses a simulation approach based on system dynamics to model the considered supply chain and to explore its performance. For the simulation test, two types of simulation models were developer which represent a supply chain without information sharing and a supply chain with information sharing. Test results were analyzed in terms of the bullwhip effect, the inventory level and the stockout rate of the retailer. The results of this research may help practitioners to understand the dynamics of supply chain when the customer demand is shared. These understandings could help them to make a decision on adopting a collaborative inventory management policy based on the demand information sharing. The originality of this paper is that it deals with various business environments which are rarely considered in the previous researches. These include the length of ordering cycle, the maximum size of ordering quantity, backlog versus lost sales and the type of information shared.