Abstract: Based on information theory,systems engineering and control engineering theory,the uncertain information distortion problem in a simple two-stage supply chain was studied for the purpose of improving the stability of supply chain system. Firstly, the uncertain information distortion was generally defined and analyzed from the viewpoint of information transferring and processing. Secondly, the ordering subsystem model of a simple two-stage supply chain was built. The system transfer function and frequency response characteristics were analyzed. Two scenarios were considered: one is the traditional supply chain in which the members do not share information, the other one is the integrated supply chain in which the end customer demand information is shared by all members. According to these analyses, the influences of information distortion on supply chain performances were discussed. Finally, the benefits of information sharing in supply chains were effectively measured by using information theory and control engineering approach.