Information Sharing and Supply Chain Performance: Understanding Complexity, Compatibility, and Processing

Practically all supply chains operate under conditions of uncertainty. To mitigate this uncertainty and increase performance, organizations within chains exchange information to achieve operational cohesion. However, as some researchers have noted, some supply chains benefit more from increased levels of information sharing than others (e.g. Cachon & Fisher, 2000). To assist in explaining the performance differences experienced by supply chains engaged in information-sharing activities, we introduce a new perspective of information sharing within supply chains based on organizational information processing theory (Galbraith, 1973). More specifically, our work and derived conceptual model posit that individual supply chains may be examined as single information processors and that their characteristics can induce complexities in the shared information which subsequently influence how supply chains process this information. Furthermore, the degree to which supply-chain members’ information systems are compatible with each other is posited to also play a significant role in information-processing capabilities.