A Study On Supply Chain Ordering Policies Based On The Information Sharing

Modern supply chains are looking for new initiatives and practices to gain competitive advantages in a fiercely competitive marketplace. The bullwhip effect became one of the urgent problem needed to be solved. Bullwhip effect represents the amplification and distortion of demand variability as moving upstream in a supply chain,causing excessive inventories, insufficient capacities and high operational costs. A growing body of literature recognizes ordering policies and the lack of coordination as two main causes of the bullwhip effect. This paper studies the coordination mechanism between the echelons of the supply chain, different from previous studies by the thought of integrated management to achieve coordination, this paper take demand information into basic ordering policies, to achieve coordination between the echelons of the supply chain.This paper firstly studied the traditional(R, S) policy in different demand information sharing level, not sharing or total sharing. It is concluded that when total sharing demand information on the supply chain,supply chain performance is obviously better than the traditional not sharing supply chain.Proved that the demand information sharing in supply chain management plays a very important and positive role.Then,under the precondition of this conclusion,combined with the previous literature, this paper proposes a coordination mechanism based on ordering policy. In this policy, replenishment orders are divided into two parts: the first is to inform the upstream echelons about the actual customer demand and the second is to inform about the adjustment of the inventory position, smoothing at the same time the orders of the different levels of the supply chain. By the method of system control theory study, onthe basis of signal diagram and simulation research method, quantifies the impact on different ordering policies to supply chain performance.The performance measures are the value of the bullwhip effect, inventory change rate and the average service level.The simulation results have proved that this information sharing ordering policy have certain advantages, using this strategy can well realize the cooperation and coordination among supply chain echelons. Finally, a case study to prove the general applicability of the policy.The main meaning of this paper is that we have confirmed that information sharing can be achieved through the ordering policy itself with a limited effort of implementation. It also proved that increasing the level of coordination among supply chain members in order policy can achieve both efficiency and resiliency.