Decentralised decision-making with information sharing vs. centralised decision-making in supply chains |
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Authors: | Mansour Rached Jean-Pierre Campagne |
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Affiliation: | 1. College of Computing and Informatics, Saudi Electronic University, Tabuk, Saudi Arabia;2. Université de Tunis El Manar, F.S.T., LIP2-LR99ES18, Tunis, Tunisia;3. Université de Lyon, INSA-Lyon, DISP EA4570, Villeurbanne, France |
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Abstract: | In recent years, implementing coordination mechanisms in decentralised supply chains to reduce the well-known negative effects of decentralisation, such as the ‘bullwhip effect’, has become a considerable challenge. Furthermore, with the dramatic developments in information and communication technologies, real-time information sharing has become increasingly easier to implement. In this work, we study a mono-product divergent supply chain composed of a supplier, a warehouse, retailers and customers in the context of decentralised and centralised decisions. The main objective of this study is to compare a decentralised supply chain combined with different scenarios of simultaneous upstream and downstream information sharing vs. a centralised supply chain. A mathematical model is developed to compare the logistics costs in the two decision contexts. The experimental results clearly show that the simultaneous sharing of customer demand and supplier-warehouse lead time information in a decentralised supply chain yields nearly equivalent logistics costs as the centralised supply chain context. However, the main beneficiary of the sharing is the warehouse, which receives approximately two-thirds of the benefit. Thus, incentives and revenue sharing contracts should be implemented to motivate and balance the benefits between supply chain partners. |
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Keywords: | supply chain information sharing cooperation decentralised decision centralised decision value of information |
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