Measuring the impact of E-Collaboration on supply chain parties : a value-based management approach

Abstract

Information sharing in E-Collaboration is increasingly prevalent. This study measures the shareholder value created by E-Collaboration along a supply chain. Three system dynamics (SD) models are developed to investigate the impact of three different information sharing strategies, namely, non-information sharing, partial information sharing, and full information sharing. The impact on different supply chain parties is quantified from the value-based management perspective and economic value added (EVA) is adopted as the value-based performance metric. A numerical example of an E-Commerce retailer-distributor-manufacturer supply chain is presented and followed by profound implications. The analysis demonstrates how value is amplified by E-Collaboration and the unified metric reveals added value's highly imbalanced distribution among different parties. The EVA boost reaped by the manufacturer is about 1000 times more than the retailer's gain under full information sharing. The study provides an original contribution to this stream of research by proposing a uniformed supply chain performance metric, revealing counter-intuitive implications and guiding strategic E-collaboration.