A Tale of Two Information Asymmetries in Competitive Supply Chains

Abstract

While globalization leads to more efficient supply chain systems, at the same time, it makes them more susceptible to demand and supply-side shocks. Moreover, these risks are exacerbated by the reduced end-to-end visibility due to the fragmentation of the supply chains. Hence, oftentimes, suppliers and buyers find themselves having to make pricing and sourcing decisions without knowing the extent of demand and supply risks affecting the supply chain. In this chapter, we analyze the effectiveness of demand- and supply-side signals in enhancing the downstream and upstream information flows and their consequences on the performances of the firms in competitive supply chains.