Do electronic linkages reduce the bullwhip effect? An empirical analysis of the U.S. manufacturing supply chains

Information Systems Research

Volumn 23, Issue 3 PART 2, 2012, Pages 1042-1055

  Yao, Yuliang ^a   Zhu, Kevin Xiaoguo ^b  

^a LEHIGH UNIVERSITY   (United States)

^b UNIVERSITY OF CALIFORNIA   (United States)

Author keywords

Bullwhip effect; Econometrics; Electronic markets; Empirical operations; Information technology; Supply chain management

Indexed keywords

ECONOMICS; INFORMATION TECHNOLOGY; STATISTICS; SUPPLY CHAIN MANAGEMENT;

BULLWHIP EFFECTS; CONTRIBUTING FACTOR; ECONOMETRICS; ELECTRONIC MARKET; EMPIRICAL ANALYSIS; EMPIRICAL OPERATIONS; INFORMATION SHARING; SUPPLY CHAIN INEFFICIENCIES;

INFORMATION DISSEMINATION;

EID: 84871562930     PISSN: 10477047     EISSN: 15265536     Source Type: Journal    
DOI: 10.1287/isre.1110.0394     Document Type: Article

References (57)

1. Aeppel, T. 2010. "Bullwhip" hits firms as growth snaps back. Wall Street Journal (January 27) A1, A6.
2. Allen, D. S. 1997. Do inventories moderate fluctuations in output? Federal Reserve Bank St. Louis Rev. (July-August) 39-50.
3. Anderson, E., Jr., C. Fine, G. Parker. 2000. Upstream volatility in the supply chain: The machine tool industry as a case study. Production Oper. Management 9(3) 239-261.
4. Bakos, J. Y. 1991. Information links and electronic marketplaces: Implications of interorganizational information systems in vertical markets. J. Management Inform. Systems 8(2) 31-52.
5. Bakos, Y. J. 1997. Reducing buyer search costs: Implications for electronic marketplaces. Management Sci. 43(12) 1676-1692.
6. Barua, A., C. H. Kriebel, T. Mukhopadhyay. 1995. Information technologies and business value:-An analytic and empirical investigation. Inform. Systems Res. 6(1) 3-23.
7. Barua, A., S. Ravindran, A. B. Whinston. 1997. Efficient selection of suppliers over the Internet. J. Management Inform. Systems 13(4) 117-137.
8. Barua, A., P. Konana, A. B. Whinston, F. Yin. 2004. An empirical investigation of net-enabled business value. MIS Quart. 28(4) 585-620.
9. Blanchard, O. 1983. The production and inventory behavior of the American automobile industry. J. Political Econom. 91(3) 365-400.
10. Brynjolfsson, E., L. Hitt. 1996. Paradox lost? Firm-level evidence on the returns to information systems spending. Management Sci. 42(4) 541-558.
11. Cachon, G. P., T. Randall, G. M. Schmidt. 2007. In search of the bullwhip effect. Manufacturing Service Oper. Management 9(4) 457-479.
12. Caplin, A. S. 1985. The variability of aggregate demand with (S, s) inventory policies. Econometrica 53(6) 1395-1409.
13. Cash, J. I., B. Konsynski. 1985. IS redraws competitive boundaries. Harvard Bus. Rev. 63(2) 134-142.
14. Chen, F., Z. Drezner, J. K. Ryan, D. Simchi-Levi. 2000. Quantifying the bullwhip effect in a simple supply chain: The impact of forecasting, lead times, and information. Management Sci. 46(3) 436-443.
15. Cheng, J., B. R. Nault. 2007. Industry level supplier-driven IT spillovers. Management Sci. 53(8) 1199-1261.
16. Choudhury, V., K. S. Hartzel, B. R. Konsynski. 1998. Uses and consequences of electronic markets: An empirical investigation in the aircraft parts industry. MIS Quart. 22(4) 471-507.
17. Clemons, E. K., S. P. Reddi, M. C. Row. 1993. The impact of information technology on the organization of economic activity: The move to the middle hypothesis. J. Management Inform. Systems 10(2) 9-36.
18. Coase, R. 1937. The nature of the firm. Economica 4(16) 386-405.
19. Croson, R., K. Donohue. 2006. Behavioral causes of the bullwhip effect and the observed value of inventory information. Management Sci. 52(3) 323-336.
20. Demsetz, H. 1968. The cost of transacting. Quart. J. Econom. 82(1) 33-53.
21. Dedrick, J., S. X. Xu, K. X. Zhu. 2008. How does information technology shape supply-chain structure? Evidence on the number of suppliers. J. Management Inform. Systems 25(2) 41-72.
22. Dong, S., S. X. Xu, K. X. Zhu. 2009. Information technology in supply chains: The role of IT-enabled resources under competition. Inform. Systems Res. 20(1) 18-32.
23. Ghali, M. A. 1987. Seasonality, aggregation and the testing of the production smoothing hypothesis. Amer. Econom. Rev. 77(3) 464-469.
24. Gaur, V., M. L. Fisher, A. Raman. 2005. An econometric analysis of inventory turnover performance in retail services. Management Sci. 51(2) 181-194.
25. Greene, W. H. 1997. Econometric Analysis. Prentice Hall, Upper Saddle River, NJ.
26. Grover, V., M. K. Malhotra. 2003. Transaction cost framework in operations and supply chain management research: Theory and measurement. J. Oper. Management 21(4) 457-473.
27. Holt, C. C., F. Modigliani, J. P. Shelton. 1968. The transmission of demand fluctuations through a distribution and production systems, the TV-set industry. Canad. J. Econom. 1(4) 718-739.
28. Jonston, H. R., M. R. Vitale. 1988. Creating competitive advantage with interorganizational systems. MIS Quart. 12(2) 153-165.
29. Kahn, J. A. 1992. Why is production more volatile than sales? Theory and evidence on the stockout-avoidance motive for inventory-holding. Quart. J. Econom. 107(2) 481-510.
30. Kennedy, P. 2003. A Guide to Econometrics, 5th ed. MIT Press, Cambridge, MA.
31. Krane, S. D., S. N. Braun. 1991. Production smoothing evidence from physical-product data. J. Political Econom. 99(3) 558-581.
32. Lee, H. L., V. Padmanabhan, S. Whang. 1997a. The bullwhip effect in supply chains. Sloan Management Rev. 38(3) 93-102.
33. Lee, H. L., V. Padmanabhan, S. Whang. 1997b. Information distortion in a supply chain: The bullwhip effect. Management Sci. 43(4) 546-559.
34. Lee, H. G., T. Clark, K. Y. Tam. 1999. Research report: Can EDI benefit adopters? Inform. Systems Res. 10(2) 186-195.
35. Lee, H. L., V. Padmanabhan, S. Whang. 2004. Comments on "Information distortion in a supply chain: The bullwhip effect". Management Sci. 50(12 Supplement) 1887-1893.
36. Lucking-Reiley, D., D. F. Spulber. 2001. Business-to-business electronic commerce. J. Econom. Perspect. 15(1) 55-68.
37. Malone, T. W., J. Yates, R. I. Benjamin. 1987. Electronic markets and electronic hierarchies. Comm. ACM 30(6) 484-497.
38. Miron, J. A., S. P. Zeldes. 1988. Seasonality, cost shocks, and the production smoothing model of inventories. Econometrica 56(4) 877-908.
39. Mithas, S., J. L. Jones. 2007. Do auction parameters affect buyer surplus in e-auctions for procurement? Production Oper. Management 16(4) 455-470.
40. Mithas, S., J. L. Jones, W. Mitchell. 2008. Buyer intention to use Internet-enabled reverse auctions? The role of asset specificity, product specialization, and non-contractibility. MIS Quart. 32(4) 705-724.
41. Mukhopadhyay, T., S. Kekre. 2002. Strategic and operational benefits of electronic integration in B2B procurement. Management Sci. 48(10) 1301-1313.
42. Mukhopadhyay, T., S. Kekre, S. Kalathur. 1995. Business value of information technology: A study of electronic data interchange. MIS Quart. 19(2) 137-156.
43. Rumyantsev, S., S. Netessine. 2007. What can be learned from classical inventory models? A cross-industry exploratory investigation. Manufacturing Service Oper. Management 9(4) 409-429.
44. Saeed, K. A., M. K. Malhotra, V. Grover. 2005. Examining the impact of interorganizational systems on process efficiency and sourcing leverage in buyer-supplier dyads. Decision Sci. 36(3) 365-396.
45. Shah, R., H. Shin. 2006. Relationships among information technology, inventory, and profitability: An investigation of level invariance using sector level data. J. Oper. Management 25(4) 768-784.
46. Srinivasan, K., S. Kekre, T. Mukhopadhyay. 1994. Impact of electronic data interchange technology on JIT shipments. Management Sci. 40(10) 1291-1304.
47. Tatsiopoulos, I. P., S. T. Ponis, E. A. Hadzillias, N. A. Panayiotou. 2002. Realization of the virtual enterprise paradigm in the clothing industry through e-business technology. Production Oper. Management 11(2) 413-423.
48. Terwiesch, C., Z. J. Ren, T. H. Ho, M. A. Cohen. 2005. An empirical analysis of forecast sharing in the semiconductor equipment supply chain. Management Sci. 51(2) 208-220.
49. Williamson, O. E. 1975. Markets and Hierarchies: Analysis and Antitrust Implications. Free Press, New York.
50. Williamson, O. E. 1979. Transaction-cost economics: The governance of contractual relations. J. Law Econom. 22(2) 233-261.
51. Wooldridge, J. M. 2002. Econometric Analysis of Cross Section and Panel Data. MIT Press, Cambridge, MA.
52. Yao, Y., M. Dresner, J. Palmer. 2009. Private network EDI vs. the Internet electronic markets: A direct comparison of fulfillment performance. Management Sci. 55(5) 843-852.
53. Zhou, Z., K. X. Zhu. 2010. The effects of information transparency on suppliers, manufacturers and consumers in online markets. Marketing Sci. 29(6) 1125-1137.
54. Zhu, K. 2004a. Information transparency of business-to-business electronic markets: A game-theoretic analysis. Management Sci. 50(5) 670-685.
55. Zhu, K. 2004b. The complementarity of IT infrastructure and ecommerce capability: A resource-based assessment of business value. J. Management Inform. Systems 21(1) 167-202.
56. Zhu, K., K. L. Kraemer. 2002. E-commerce metrics for net-enhanced organizations: Assessing the value of e-commerce to firm performance in the manufacturing sector. Inform. Systems Res. 13(3) 275-295.
57. Zhu, K., K. L. Kraemer, V. Gurbaxani, S. Xu. 2006. Migration to open-standard interorganizational systems: Network effects, switching costs, and path dependency. MIS Quart. 30(3) 515-539.