Supply Chain Decision Making: Will Shorter Cycle Times and Shared Point-of-Sale Information Necessarily Help?

Abstract

Using a simulated supply chain experiment based on the well-known “beer game,” we examine how changes in order and delivery cycles, availability of shared point-of-sale (POS) information, and the pattern of customer demand affect supply chain efficiency. We find that speeding up cycle time is beneficial, but the sharing of POS information is not necessarily so. Whether or not the sharing of POS information is beneficial depends on the nature of the demand pattern represented by the POS information. If the demand pattern conveys continual change in ultimate downstream customer demand (as does an S-shaped demand pattern), the POS information can distract the upstream decision maker from what is perhaps more immediately relevant information, orders placed by the proximate downstream agent and the supply line.