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Information Sharing in Multi-Tier Supply Chains - Moving Beyond the Dyads

Kembro, Joakim LU (2015)
Abstract
As international competition increased towards the end of last century, companies realized the importance of collaborating and sharing information with suppliers and customers to remain competitive. By sharing information such as forecasts of future demand with partners in the supply chain, it was possible to lower inventory holding costs and increase the service level to customers, and thereby increase the competitiveness of the involved companies.



Previous research has proposed several benefits related to information sharing in supply chains. Suggested benefits include, for instance, better planning and scheduling of production lines, improved allocation and utilization of resources for transportation and warehousing,... (More)
As international competition increased towards the end of last century, companies realized the importance of collaborating and sharing information with suppliers and customers to remain competitive. By sharing information such as forecasts of future demand with partners in the supply chain, it was possible to lower inventory holding costs and increase the service level to customers, and thereby increase the competitiveness of the involved companies.



Previous research has proposed several benefits related to information sharing in supply chains. Suggested benefits include, for instance, better planning and scheduling of production lines, improved allocation and utilization of resources for transportation and warehousing, and reduced inventory levels and tied-up capital. However, it appears that few companies have been able to implement and benefit from information sharing. Several researchers conclude that information sharing in the supply chain is limited. Particularly, it seems as if companies have not been able to benefit from sharing information across multiple tiers in the supply chain. The lack of information sharing across multiple tiers is a challenge which is important to address considering that companies continue to struggle with problems related to the, so called, bullwhip effect. A supply chain which suffers from the bullwhip effect can experience distorted demand information as it is shared upstream in the chain. Such variations in demand information can lead to incorrect production planning and thereby alternately high inventory levels and increased costs for overtime and rush orders.



Against this background, several questions arise: For what reasons do companies refrain from sharing information across multiple tiers despite the fact that literature suggest that it is beneficial? Further, are there any companies that have implemented information sharing across multiple tiers and, if so, what are the documented benefits? Searching the answers to these questions reveals a gap in literature in that the majority of previous research studies have focused on dyadic relationship (i.e. supplier-buyer) instead of multi-tier supply chains (e.g. supplier-manufacturer-customer). The purpose with this dissertation is therefore to move beyond the dyads and explore information sharing in the supply chain, and investigate opportunities and challenges involved with sharing information across multiple tiers. The purpose is addressed in three separate but connected studies. Following a pilot study, a systematic literature review is conducted to establish current knowledge in the research area. Thereafter, two empirical studies are conducted: a case study which maps an entire supply chain where data is collected from multiple tiers; and a Delphi study including a panel of experts who share their insights through multiple questionnaires.



The findings indicate that companies, for different reasons, refrain from sharing information across multiple supply chain tiers. One reason is the many challenges involved with implementing information sharing across multiple supply chain tiers. The major challenges include lack of trust between companies; lack of information quality; difficulties to share risks and benefits; lack of business processes; and the lack of a dominant player who can initiate change in the supply chain. Many companies are also preoccupied with internal issues and lack the ability to engage in information sharing across the supply chain. Another reason, from the perspective of contingency theory, seems to be that information sharing across multiple tiers is only beneficial in few, particular contexts. Such contexts relate to planned changes in the supply chain, for example in relation to new product introductions when future demand is uncertain. Findings also suggest a negative inter-relation between important and feasible contexts. In other words, in cases where it is possible to implement information sharing it is perceived to be less valuable and in cases where it is more valuable it is more difficult to implement. The findings further suggest that companies focus their information sharing with supply chain partners that represent high intensity of interdependence. Interdependence theory can thus help to explain why companies mostly share information with dyadic, strategic partners where the partners represent a large percentage of each other’s portfolio and turnover. Moving beyond the dyads, the intensity of interdependence is reduced as firms are embedded in many networks and often have multiple suppliers and customers. The willingness to engage in multi-tier information sharing is therefore reduced.



This dissertation, which is one of the first to study information sharing in the extended supply chain, indicates that information sharing across multiple tiers is a rare phenomenon in industry. The dissertation also points out that several aspects must be considered to be able to implement and benefit from information sharing across multiple tiers. One of the contributions of the dissertation is a conceptual framework which can be used to guide future research and also function as decision support for companies to address and implement multi-tier information sharing. (Less)
Please use this url to cite or link to this publication:
author
supervisor
opponent
  • Professor Stentoft, Jan, University of Southern Denmark
organization
publishing date
type
Thesis
publication status
published
subject
keywords
supply chain management, information sharing, collaboration, exploratory research, interdependence, contingency theory, networks, demand uncertainty, bullwhip effect
pages
207 pages
publisher
Lund University (Media-Tryck)
defense location
Room M:B, M-building, Ole Römers väg 1, Lund University Faculty of Engineering, LTH.
defense date
2015-08-21 13:00
ISBN
978-91-7623-380-1
language
English
LU publication?
yes
id
2d08c081-8949-4a55-854f-86b3581c2aa5 (old id 5434846)
date added to LUP
2015-06-01 14:35:26
date last changed
2016-09-19 08:45:04
@misc{2d08c081-8949-4a55-854f-86b3581c2aa5,
  abstract     = {As international competition increased towards the end of last century, companies realized the importance of collaborating and sharing information with suppliers and customers to remain competitive. By sharing information such as forecasts of future demand with partners in the supply chain, it was possible to lower inventory holding costs and increase the service level to customers, and thereby increase the competitiveness of the involved companies.<br/><br>
<br/><br>
Previous research has proposed several benefits related to information sharing in supply chains. Suggested benefits include, for instance, better planning and scheduling of production lines, improved allocation and utilization of resources for transportation and warehousing, and reduced inventory levels and tied-up capital. However, it appears that few companies have been able to implement and benefit from information sharing. Several researchers conclude that information sharing in the supply chain is limited. Particularly, it seems as if companies have not been able to benefit from sharing information across multiple tiers in the supply chain. The lack of information sharing across multiple tiers is a challenge which is important to address considering that companies continue to struggle with problems related to the, so called, bullwhip effect. A supply chain which suffers from the bullwhip effect can experience distorted demand information as it is shared upstream in the chain. Such variations in demand information can lead to incorrect production planning and thereby alternately high inventory levels and increased costs for overtime and rush orders.<br/><br>
<br/><br>
Against this background, several questions arise: For what reasons do companies refrain from sharing information across multiple tiers despite the fact that literature suggest that it is beneficial? Further, are there any companies that have implemented information sharing across multiple tiers and, if so, what are the documented benefits? Searching the answers to these questions reveals a gap in literature in that the majority of previous research studies have focused on dyadic relationship (i.e. supplier-buyer) instead of multi-tier supply chains (e.g. supplier-manufacturer-customer). The purpose with this dissertation is therefore to move beyond the dyads and explore information sharing in the supply chain, and investigate opportunities and challenges involved with sharing information across multiple tiers. The purpose is addressed in three separate but connected studies. Following a pilot study, a systematic literature review is conducted to establish current knowledge in the research area. Thereafter, two empirical studies are conducted: a case study which maps an entire supply chain where data is collected from multiple tiers; and a Delphi study including a panel of experts who share their insights through multiple questionnaires.<br/><br>
<br/><br>
The findings indicate that companies, for different reasons, refrain from sharing information across multiple supply chain tiers. One reason is the many challenges involved with implementing information sharing across multiple supply chain tiers. The major challenges include lack of trust between companies; lack of information quality; difficulties to share risks and benefits; lack of business processes; and the lack of a dominant player who can initiate change in the supply chain. Many companies are also preoccupied with internal issues and lack the ability to engage in information sharing across the supply chain. Another reason, from the perspective of contingency theory, seems to be that information sharing across multiple tiers is only beneficial in few, particular contexts. Such contexts relate to planned changes in the supply chain, for example in relation to new product introductions when future demand is uncertain. Findings also suggest a negative inter-relation between important and feasible contexts. In other words, in cases where it is possible to implement information sharing it is perceived to be less valuable and in cases where it is more valuable it is more difficult to implement. The findings further suggest that companies focus their information sharing with supply chain partners that represent high intensity of interdependence. Interdependence theory can thus help to explain why companies mostly share information with dyadic, strategic partners where the partners represent a large percentage of each other’s portfolio and turnover. Moving beyond the dyads, the intensity of interdependence is reduced as firms are embedded in many networks and often have multiple suppliers and customers. The willingness to engage in multi-tier information sharing is therefore reduced.<br/><br>
<br/><br>
This dissertation, which is one of the first to study information sharing in the extended supply chain, indicates that information sharing across multiple tiers is a rare phenomenon in industry. The dissertation also points out that several aspects must be considered to be able to implement and benefit from information sharing across multiple tiers. One of the contributions of the dissertation is a conceptual framework which can be used to guide future research and also function as decision support for companies to address and implement multi-tier information sharing.},
  author       = {Kembro, Joakim},
  isbn         = {978-91-7623-380-1},
  keyword      = {supply chain management,information sharing,collaboration,exploratory research,interdependence,contingency theory,networks,demand uncertainty,bullwhip effect},
  language     = {eng},
  pages        = {207},
  publisher    = {ARRAY(0x9f29660)},
  title        = {Information Sharing in Multi-Tier Supply Chains - Moving Beyond the Dyads},
  year         = {2015},
}