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Information Sharing for the Bullwhip Effect

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Information Sharing for the Bullwhip Effect
Information sharing for the bullwhip effect: over- or underestimated?

Bachelor thesis:
Thesis Circle:

Organization studies, 2nd semester, academic year 2011-2012
Time will tell…. A processes perspective on inter-organizational collaboration

Name: ANR: E-mail:

PC Jansen 770926 P.C.Jansen@uvt.nl

Information sharing for the bullwhip effect: over- or underestimated?
Abstract This literature review investigates the effect of information sharing from a buyer to a supplier in a supply chain on the performance of that supplier, with taking in mind that the supplier has to combat the bullwhip effect. With the existence of the bullwhip effect, a supplier cannot make right forecasts and therefore has difficulties in planning its production and/or inventory control. This research shows that information sharing is the key solution to reduce or avoid the bullwhip effect and, by that, is positively influences the performance of the supplier in the chain.

Keywords: Bullwhip, supply chain, information sharing, supplier performance, inventory control

Thesis Circle: Time will tell…. A processes perspective on inter-organizational collaboration

Supervisor:

Remco Mannak

Supervisor 2: Annemieke Stoppelenburg

Name: ANR: E-mail:

PC Jansen 770926 P.C.Jansen@uvt.nl 2

Table of contents Table of contents 1. Introduction 2. Theoretical Framework 2.1 Performance of a supplier 2.2 Information sharing 2.3 Bullwhip effect 3. Methodology 3.1 Data collection 3.2 Quality Indicators 4. Results 4.1 Information sharing is the key solution 4.2 Information sharing is not the key solution 5. Conclusion and recommendations 5.1 Conclusion 5.2 Recommendations for future research 6. Discussion and reflection 6.1 Discussion 6.2 Reflection 7. References 3 4 7 7 7 9 11 11 12 13 13 21 24 24 26 28 28 29 30

3

1. Introduction

Collaboration is something which has occurred over all times and is a way for people as well as for organizations to accomplish any goal or



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Decision Support Systems 42 (3): 1641–1656 Lin F., Huang S., and Lin S., (2002), Effects of information sharing on supply chain performance in electronic commerce, IEEE Transactions on Engineering Management, 49(3): pg. 258. Mentzer, John T. (1999). “Supplier Partnering,” Pp. 457–477 in Handbook of Relationship Marketing. Jagdish N. Sheth and Atul Parvatiyar (Eds.). Thousand Oaks, CA: Sage Publications, Inc. Metters, R. (1997). Quantifying the bullwhip effect in supply chains. Journal of Operations Management, 15: 89-100 Min, H., Zhou G. 2002. Supply Chain Modeling: Past, Present, and Future. Computers and Industrial Engineering, 43: 231-249 Mohr, J., & Spekman, R. (1994). Characteristics of partnership success: Partnership attributes, communication behavior, and conflict resolution techniques. Strategic Management Journal, 15(2) : 135-152 Moyaux, T., Chaib-Draa, B., D’Amours, S., (2007). Information sharing as a coordination mechanism for reducing the bullwhip effect in a supply chain. IEEE Transactions on Systems, Man and Cybernetics Part C: Applications and Reviews 37 (3): 396–409. Nyaga, G.N., Whipple, J.M. and Lynch, D.F. (2010), “Examining supply chain relationships: do buyer and supplier perspectives on collaborative relationships differ?”, Journal of Operations Management, Vol. 28 No. 2: 101-14. Ozer, O., W. Wei. (2004). Inventory control with limited capacity and advance demand information. Operational Research.. 52(6): 988–1000. Raghunathan, S. (2001). Information sharing in a supply chain: A note on its value when demand is nonstationary. Management Science 47(4), 605–610. Sahin, F., Robinson, E.P., (2002). Flow coordination and information sharing in supply chains: review, implications, and directions for future research. Decision Sciences 33 (4), 505–536. Sahin, F. and J. Robinson, E. Powell. 2005. 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Benefits of information sharing with supply chain partnerships. Industrial Management & Data Systems 101 (3), 114–1 32

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