Coordinating Material and Information Flows with Supply Chain Planning

Purpose of this paper This paper studies how companies can select a supply chain planning mechanism to improve the balance between material flow and information flow. Design/methodology/approach The methodology of the paper is an inductive case study approach. Coordination theory is used as a background for the paper. Based on a literature survey, determinants of the selection of a supply chain planning approach are defined. Cases of supply chain planning are used to validate the framework presented. Findings Specific supply chain characteristics need to be balanced by selecting a coordination mechanism that uses information optimally to support the material flow. Flexible material flow needs frequent updates of the plan based on accurate information. If frequent information sharing and planning practices are used to support inflexible material flow, the result may be volatility in plans, and planning resources are wasted. If a flexible material flow is supported by inadequate information, waste may be produced in the material flow, in the form of excess inventories or capacity. Research limitations/implications The paper presents a framework for finding the balance between information flows and material flows and for applying a coordination mechanism. The validity of the framework is tested with two earlier case studies. More case studies are needed to ensure the generalizability of the results. Practical implications Companies can use the framework to analyse the management of their material flow and their use of information. In future research the framework could be developed to give more support for situations with different levels and sources of uncertainty. What is original/value of paper? The paper provides a new perspective on the discussion how information should be used to improve supply chain performance.