DESARROLLO 1 Módulo Maestro

Several studies have considered information sharing as an important predicting factor for improved supply chain performance (Lee and Whang, 2000, Cachon and Fisher, 2000, Zhou and Benton Jr, 2007, Ramayah and Omar, 2010). However, very few studies have empirically examined the critical role of information sharing in enhancing supply chain performance (Tan et al., 2010, Koçoğlu et al., 2011). Sharing information such as inventory level, sales data, order status, sales forecast, and production/delivery schedule will help supply chain members to lower inventory cost involved, mitigate or reduce bullwhip effect, improve customer service, reduce payment cycle, reduce labour costs and manual operations, and ensure reliable supply and delivery (Lee and Whang, 2000). Focussing on supply chain performance will help supply chain participants enhance their motives towards information sharing. Supply chain partners sharing timely and accurate information gain the advantage to plan their strategies and delegate their functions which will eventually affect their performance level (Kocoglu et al., 2011). Table 2.3 summarises the effect of information sharing on supply chain performance.

Table 2.3: Information Sharing and Performance

Key References Performance Metrics Results Cachon and Fisher (2000) Supply chain cost positive effect on SC costs

Lee and Whang (2000) Cost, customer service and

delivery

positive effect on costs, customer service and delivery

Lee et al. (2000) Inventory reduction _{and cost reduction} positive effect on inventory _{reduction and cost reduction} Yu et al. (2001) Inventory reduction _{and cost reduction} positive effect on inventory _{reduction and cost reduction} Fawcett et al. (2007b) Operational and competitive _performance positive effect on performance

Zhou and Benton Jr (2007) Delivery performance positive effect on delivery performance

Sezen and Yilmaz (2007) Resource, output and

flexibility performance

No effect on resource, output and flexibility performance

Hsu et al. (2009) Transaction flexibility positive effect on transaction _flexibility

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Key References Performance Metrics Results Yigitbasioglu (2010) Resource utilisation, _{output and flexibility} positive effect on buyer _performance Lee et al. (2010) Efficiency and

effectiveness

positive effect on buyer performance

Zelbst et al. (2010) Cost, delivery and customer

satisfaction positive effect on SC performance

Kocoglu et al. (2011)

Costs, asset utilisation, flexibility, reliability, and responsiveness

positive effect on SC performance

Sanders et al. (2011) Costs, quality, delivery and _{new product development}

positive effect on supplier performance and indirect positive effect through communication openness

Hall and Saygin (2012) Cost and customer _{Responsiveness} positive effect on cost and _{customer responsiveness} Baihaqi and Sohal (2013) Delivery, cost, and

market and financial

indirect positive effect on performance through collaboration

Ye and Wang (2013) Cost efficiency and customer

responsiveness

positive effect on cost efficiency and customer responsiveness

Wu et al. (2014) Financial and non- _{financial measures} positive effect on SC performance

Li et al. (2014)

Efficiency and responsiveness

Information sharing (content and quality) à positive effect on SC performance

2.5.2.1 Cost

Cost and its reduction has always been the first and foremost priority of every supply chain and is considered as an important measure of performance (Ramayah and Omar, 2010). Cost performance comes under resource measures categorised by Beamon (1999) as one of the three types of performance measures. The main goal of measuring cost performance is to achieve a high level of efficiency. Financial performance, in which cost is a critical component, is still the widely used performance measure in the context of logistics and supply chain management (Gunasekaran and Kobu, 2007).

Supply chains face different types of costs such as inventory costs, logistics costs, manufacturing costs, distribution costs and operations costs (Beamon, 1999, Gunasekaran and Kobu, 2007, Lee et al., 2007). Cost is an important and most chosen measure of supply chain performance (Cachon and Fisher, 2000, Lee and Whang, 2000, Ramayah and Omar,

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2010, Sanders et al., 2011, Hall and Saygin, 2012). Cost has a direct implication on firm’s profitability. Lower the cost higher is the profitability. There is also a trade-off between cost and output and flexibility of a company. Hence, cost performance needs to be improved in order to achieve a balance between a firm’s profitability and its output (delivery and quality) and flexibility performance. For example, inventory level that a company maintains will affect delivery performance. If a company has high buffer stocks, they can easily cope up with uncertainties and can make timely delivery. However, maintaining a high buffer stock involves huge costs, which otherwise, could have been used for other company activities or could have been its profits. It also increases the risk of product obsolescence which again will increase costs.

Information sharing between supply chain partners can enhance cost performance by keeping supply chain partners well informed about customer demands, inventory levels, production and delivery schedule and promotion strategies. Based on the inventory levels at the downstream end of the supply chain, upstream chain members can start production only when the inventory level reaches a certain pre-specified level (Lee and Whang, 2000). On the other side, the downstream members can use the production and delivery schedule information to decide how much inventory level to maintain which will help them to minimise their inventory costs, stock-out costs and obsolescence costs.

2.5.2.2 Quality

Quality is critical and determined by defect-free items/services as well as defect-free transactions between supply-chain partners (Babbar et al., 2008). According to Neely et al. (1995), the emphasis of quality is more towards customer satisfaction rather than the traditional focus on “conformance to specification.” In order to satisfy customers, firms need to consider the quality of the product, quality of the service (fill rate, on-time deliveries, stock out probability, and backorder/stock out), and conformance to specification. Since the main goal of quality is to provide high level of customer service, there are likely chances that customers will turn to an alternate source if the quality criteria does not meet customer expectations (Beamon, 1999). The number of customer complaints registered will signify the level of customer satisfaction regarding the quality of products/services (Beamon, 1999). Output performance measures such as quality should focus on fulfilling customer’s goals and values. Meeting customer requirements is an indication of the fulfilment of the company’s

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strategic goals (Beamon, 1999). Customers want products to be of good quality without any damages and service such as logistics to be timely and reliable, delivering the products with low damage/loss rate. The role of information sharing towards enhancing quality performance cannot be underestimated. The downstream partners are the closest to the ultimate customers and will know customers’ preferences. If they share information related to the customers’ choice to their upstream partners, then the upstream partners can make timely decisions to fulfil customer requirements.

2.5.2.3 Delivery

Delivery performance has become one of the important measures of supply chain performance as customers have become increasingly demanding of suppliers. Customers in today’s context expect better delivery service. Delivery performance is a key performance measurement criterion that will enhance a firm’s competitiveness. On-time delivery is used as supply chain performance measure by many companies including Supply Chain Council (Zhou and Benton Jr, 2007). Speed, reliability/dependability and order fulfilment rate has been recognised as the important attributes of delivery performance (Milgate, 2001, Zhou and Benton Jr, 2007, Baihaqi and Sohal, 2013). Some customers value speed whereas others consider delivery reliability more important (Beamon, 1999). Focusing on fast, reliable delivery and responsiveness to changing customer needs, organisations like Caterpillar, General Motors, ICL, Philips, and Rank Xerox have achieved integration of their supply chain (Narasimhan and Jayaram, 1998).

Improvement in information flow will reduce supply chain uncertainty, speed up the decision making process and enhance the level of collaboration which will eventually lead to a better supply chain delivery performance (Milgate, 2001, Ramayah and Omar, 2010). Delivery largely depends on operations and managerial decisions made by upstream members of the supply chain (Milgate, 2001). Delivery performance will directly affect the inventory level of firms which will eventually affect cost. For suppliers, keeping extra inventory might help them cope up with supply chain uncertainties and maintain the reliability of their delivery performance. Timely and reliable delivery from the upstream partners will improve the delivery performance of the downstream partners as well.

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Information sharing plays a central role in maintaining the speed and reliability of delivery performance. Downstream members can provide accurate and timely information related to customer demands and the inventory levels of the downstream partners to the upstream partners. With this information suppliers or manufacturers can enhance their planning and scheduling to improve their delivery performance. In contrast, upstream members can provide correct information regarding their production schedule, inventory levels, delivery schedules, tracking and tracing and delays if any. With sufficient information both parties can contribute towards better delivery performance. Furthermore, informing downstream partners at the right time about any delays or disruptions in delivery will help them to mitigate the impact of late delivery. Information sharing will not only improve delivery performance, it will also help to minimise the impacts of late deliveries.

2.5.2.4 Flexibility

The ability of supply chain members to adjust to changes such as demand uncertainty, manufacturing unreliability, the introduction of new products, or supplier uncertainty is referred to as flexibility (Beamon, 1999, Beamon, 1998). Flexibility plays an important role in the success of a supply chain since the supply chain exists in an uncertain environment (Beamon, 1999). To satisfy the customer needs, supply chains should demonstrate a great degree of flexibility in the range and volume of products or services they can accommodate (Bhagwat and Sharma, 2007, Babbar et al., 2008). Without flexibility, firms may lose customers who are attracted to alternative products or services provided by competitors, thus affecting their performance.

While the use of flexibility in supply chain analysis has not been frequent, there are a range of advantages that a flexible supply chain can achieve, such as reduction in the number of lost sales, reduction in the number of late orders, increased customer satisfaction and ability to cope with periods of poor supplier performance and poor delivery performance (Beamon, 1999). A supply chain needs to be flexible in different aspects such as volume, delivery, mix (the ability to change the variety of products) and new product (Beamon, 1999, Chan, 2003). Information sharing plays a central role in enhancing supply chain flexibility of firms. For example, volume flexibility is affected by demand uncertainty (Ramayah and Omar, 2010). The downstream supply chain partners need to keep their upstream partners up-to-date about the changing customer demands. The upstream members should also keep their suppliers

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updated about their inventory levels. With information sharing the inventories can be replenished timely and quickly and hence, volume flexibility can be achieved. Information sharing can be a better option in terms of costs to deal with demand uncertainty rather than adding buffer stocks (Yigitbasioglu, 2010).