Measuring supply chain coupling: an information system perspective

Abstract

Supply chain management often requires the integration of inter- and intra-organizational relationships and coordination of different types of flows within the entire supply chain structure. Inter-company integration and coordination via information technology has become a key to improved supply chain performance. Recent advances in information technology enable firms to manage effectively and inexpensively the coordination of not only the physical flow of materials but also the flow of different types of information such as demand, capacity, inventory, and scheduling, through a supply chain. Despite its importance, little attention has been given in the literature to the issue of measuring the magnitude and the effectiveness of available information that logistics information systems provide. This study provides a generic measure to show how well or to what degree a firm is integrated or “coupled” with the members of its supply chain structure from an information flow system perspective. The measure, called degree of supply chain coupling (DSCC), is a 2-tuple index which takes into account both the intensity and extent to which information about demand, capacity, inventory, and scheduling is shared and used by the firm in both directions of the supply chain. We indicate several productive practical uses of the DSCC measure at both macro and micro levels.