THE ROLE OF INFORMATION TECHNOLOGY IN MANAGING SUPPLY CHAIN FLUCTUATIONS

Supply chains suffer from fluctuations that occur in the inventories along the chain. These fluctuations disrupt the product output, are costly in capital, and can result in considerable disruption and hardship in personal lives. Standard techniques from statistical physics can lead to insights on the nature of the fluctuations and on means for their management control. The physics techniques show that the nature of the fluctuations depends on the extent of the information exchange between the entities in the supply chain, and that the effectiveness of management attempts to control the fluctuations depends strongly on the nature and the extent of information exchange. An easy-to-use interactive learning simulation program (a learning object) that can be accessed with a laptop, is described that demonstrates the impact of information exchange on management control of the fluctuations.