Improving the interorganizational supply chain through optimization of information flows

Coordination is the management of dependencies between activities. Given that supply chains represent the functional integration of many interdependent activities associated with the flow of goods, coordination theory offers a framework for understanding and designing supply chains. Supply chains are separated into two distinct substructures: physical (dealing with the flow and storage of goods) and information (dealing with information associated with those goods). Optimization that alters the storage and movement of information and incorporates the impact of information technology leads to a distinct set of node connections and configurations for each substructure. Our analysis uses transaction cost economics to contrast the differences between structures infused with information technology and traditional supply chains.

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