Quantitative evaluation of an information network in a supply chain

Abstract

Effective supply chain management can be performed by utilizing information owned by each entity in a supply chain. Namely, it is critical for successful supply chain management to build an adequate information network to acquire necessary information among entities. This paper presents a method for quantitatively evaluating the adequacy of an information network in a supply chain. The method divides the information network into several sub-networks based on the types of information, such as demand, and inventory. Each sub-network i is evaluated using a sub-network evaluation index, calculated as the L1 distance between the vectors RIi and RVi, divided by the maximum sum of the ranking differences determined by the number of supply chain entities. RIi denotes the rank of the rate of each entity's information referred to by other entities, while RVi denotes the rank of information value each entity owns. The information network is then evaluated comprehensively as the evaluation index SCV, obtained by summing the weighted values of each sub-network evaluation index. We examined the proposed method through numerical examples using a supply chain model during a recovery process from disruption by a natural disaster, such as a tsunami. Results demonstrate that the method can quantitatively evaluate a supply chain information network based on its structure and the information value each entity owns, providing value for planning and designing information networks.