It has been pointed out that a vital element of SCM systems is the sharing of information such as sales figures and delivery plans between multiple companies or between different divisions of a company. However, the potential benefits of SCM for individual companies that actually share information has yet to be properly investigated.
In view of this, the present study modeled company activities in a way that considered decision-making not just over the execution-level, but also over the tactics- and strategy-level. Simulation was then used to investigate the impact of information sharing on company gross profits.
In this study on supply chains in the electronics industry, we confirmed that sharing information such as product plan and procurement plan between a component manufacturer and assembly manufacturer can lead to improved gross profits for all companies involved. We demonstrated that the benefit of sharing strategy-level plans is greater than in the case of sharing execution- and tactics-level information. The increase in gross profit was seen to be particularly large in the case of declining demand. In addition, while earlier studies evaluated the impact of information sharing by looking at inventory levels, this study confirms that reducing inventory does not necessarily lead to improved gross profits, thereby highlighting the importance of gross profits as a measure for assessing the impact of information sharing.
Tsuksihiama, Takahiro; Onari, Hisashi; and Hamada, Toshimitsu, "Impact of Information Sharing in Supply Chain Management" (2002). ICEB 2002 Proceedings. 19.