The Importance of Information Sharing in Blanket Order: Case Studies of System Dynamics Simulation

This chapter aims to provide references of the collaboration impact to blanket order replenishment system by performing dynamic system simulation. System Dynamics Simulation has been widely used in understanding systemic implications throughout the supply chain. Two different types of relationships in the industry, sister company and brokerage, are tested with several scenarios of system dynamics stock and flow model that are created in Vensim PLE-Plus based on beer game modification. For each type of industry, one scenario is developed to mimic the current system, and some other scenarios describe alternatives of improvement. For both types of industry, the implementation models involve a three-echelon supply chain. The simulation reveals that collaboration in blanket order is able to reduce the bullwhip effect and total supply chain cost. The case studies demonstrate the best scenario of collaboration in a blanket order system is a retailer–supplier partnership with minimizing delay. The best scenario has reduced cost and bullwhip effects. As a continuation of this strategy, a managerial implication had been developed by empowering the strength of blockchain information sharing.