Bull whip effect 3

For example the two retailers may take turns lowering

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Unformatted text preview: plier, it may be potentially used as a pricefixing instrument between the two retailers. For example, the two retailers may take turns lowering the price by the use of forecast signals and avoid cut-throat price competition. This practice may be a subject of scrutiny by the antitrust authorities. Again, but for a different reason now, the supplier must make sure that the shared information will not be used beyond the original intent. Technology is another constraint in information sharing. Implementation of a cross-organizational information system is costly, time-consuming and risky. Partners may not agree on the specifications of the technical system, e.g., EDI standards, or how to split the cost of investing in the system. The timeliness and accuracy of the shared information could be another major hurdle. PC manufacturers often complain about not being able to get accurate sellthrough data from their resellers. Some resellers share such data on a monthly basis, but then the definition of a month varies by resellers - some from the first day of the month to the first day of the next, some from 15th to l5th, and so on. In addition, some resellers would share the data on a weekly basis. Since the manufacturers are interested in the 14 aggregate sell-through data of their products, significant efforts are needed to ensure consistency of the aggregated data. Finally, we should note that information sharing is only an enabler for better coordination and planning of the supply chain. Hence, companies must develop capabilities to utilize the shared information in an effective way. We have heard that some manufacturers demand POS data from the retailers, but then did not know how to make use of the data to improve their forecasts. Consequently, the benefits of information sharing were not fully realized. Information sharing will continue to form the basis of supply chain integration. Current advances in information technologies will accelerate such a practice. Nevertheless, whether the full value of information sharing can be realized or not de...
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