Information Sharing in Supply Chains

Supplier and customer relationship types Level of information sharing 

Strategic customer/supplier relationship medium-high 

What has not yet been made subject of discussion to an adequate extent is the transfer of information between supply chain partners. This issue is closely related to the previous sections in which the diverse options of managing a firm s buyers and suppliers have been examined. As already indicated, the differences in the relationship types discussed in the previous sections do in fact also affect the character of the information exchange between the collaborating firms. 

Therefore, in the following, information sharing between buyers and suppliers is discussed. Broadly defined, information sharing refers to the extent to which critical and proprietary information is communicated to one s supply chain partner (Li and Lin 2006). The purpose of exchanging information can be multiple for example, in the product development process, the buyer discloses product specifications to a supplier, so that the supplier can design and deliver the fitting part (see Table 7.2 for different types of information sharing in the development process). 

Nevertheless, there is a type of information that the final customer determines and that definitely must not be underestimated demand. However, demand information in this context is only handled indirectly, as forwarded by retailers and wholesalers. 

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The core tenet in developing flexible supply chains is the practice of collaboration. Supply chain collaboration is the confluence of all parties in the supply chain acting in unison towards common objectives. Collaborative partners share information, knowledge, risk, and profits (Men-tzer et al., 2000) based on a foundation of trust and commitment to one another. Ultimately, as organizations move beyond mere operational-level exchanges toward collaboration, supply chains become more competitive (McLaren, Head, Yuan, 2002). Supply chain collaboration does not happen on its own, Mentzer et al. (2000) found that certain conditions or enablers must be in place for partners to forge a collaborative union and share in the benefits ofthe effort. Specifically, the authors found that collaborative relationship required partners in supply chains to ... 

Lee, H.L., Whang, S. (2000). Information sharing in a supply chain. International Journal of Technology Management, 20(flA), 373. 

Li, L. (2002). Information sharing in a supply chain with horizontal (Mmpetitioa. Management Science, 48(9), 1196. 

Mishra et al. (2001) discuss the benefits related to information sharing in a supply chain, where prices are key decision variables (both the manufacturer and the retailer set prices based on their forecasts of an unknown demand). Demand is a linear function of retail price. They analyze a make-to-order setting, in which the production takes place after realizing the demand, and a make-to-stock setting, in which the production is completed before realizing the demand. In both settings prices are set prior to demand realization. The paper analyzes how prices are set and forecasts are shared in this complex environment. 

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