Effects of information transparency and cooperation on supply chain performance: a simulation study

Abstract

This research explores the effect of information transparency and cooperation among the front nodes of supply chains. Although published works in the supply chain (SC) domain underline the need for information transparency and cooperation for competitiveness of firms, the majority among these are conceptual or empirical. As such, the domain requires fresh effort towards analytical and simulation based research for validation. In the present work, simulation is used as the research methodology. The simulation platform is developed in ARENA®, which is based on simulation language SIMAN. It has the capability to model multi-product, multi-echelon supply chains. Cooperation is depicted in the form of demand pooling and accelerated delivery of consignments from cooperating SC nodes, when stock-out contingency occurs at a particular node. The modelling also explores the effects of full, partial and zero level of information transparency on the SC performance. The simulation results suggest that these initiatives improve SC service time performance. It is also observed that more advantages from cooperation and information transparency are obtainable when the SC is leaner. The studies also highlight that such SC initiative that motivates local optimisation at the nodes is counter-productive to SC wide performance.

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