Effects of supply chain integration and information sharing on supply chain performance

Abstract

Maintaining efficiency of a supply chain has been the major thrust area for an industry. Along with the flow of material, knowledge and finance, the supply chain also facilitates the flow of information across players. Many industries have started paying attention to this information flow across the supply chain partners in order to gain individual and total system benefits. This information flow among partners, although present in every chain, may not benefit all the players equally. Although there have been cases of such systems helping the partners in the chain, their effect on individual players is not verified. In our study as follows, we have tried to show this effect of information flow on the supply chain partners across various industries. First, four major industries were chosen across criteria’s of cost-efficiency v/s responsiveness and Product v/s service framework to show the various touch points of information flow across these chains. Across these points, the kind and extent of information flow and their valuation in terms of supply chain parameters was explored. Following this, important parameters of supply chain performance were chosen and the impact of each parameter on industry supply chain was discussed. The second part of our study aimed at analysing the effect of information system on each such parameter and hence, towards finding an optimal solution of buy or forbid decision for the incumbent player towards paying the investment costs for such system. The variations in SC parameters such as order quantity (Q) and Investment (It) was shown with the changes in decision variables. In the end, we came up with a suggestive decision flowchart and mathematical model for a supply chain player for decide the best alternatives on basis of his industry and company.