Effects of information sharing on supply chain performance in electronic commerce

Abstract

As businesses adopt electronic commerce, information exchange between business partners within a supply chain becomes more essential. Information exchange is often considered when companies implement the Extranet. This study aims to analyze the impact of various levels of information sharing including order, inventory, and demand information, which is based on transaction costs. This study further examines the effects on supply chain performance in electronic commerce. Specifically, the multiagent simulation system Swarm is employed to simulate and analyze the buyer-seller correlation in sharing information among business partners in supply chains. Our findings indicate that the more detailed information shared between firms, the lower the total cost, the higher the order fulfillment rate, and the shorter the order cycle time. In other words, information sharing may reduce the demand uncertainty that firms normally encounter. Firms that share information between trading partners tend to transact with a reduced number of suppliers. In sum, this work illustrates the effects of various levels of information sharing on supply chain performance in electronic commerce.