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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
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- Fall '08
- Industrial Engineering