A Strategic Framework for Multi-Echelon Inventory System Selection

Abstract

Multi-echelon inventory management - as a fundamental part of supply chain management - has become the focus of research in recent years. In a multi-echelon inventory system, finished product inventory may be located at multiple stages and locations in the supply chain but it is targeting the same consumers. This paper introduces a framework for selecting the appropriate multi-echelon inventory system given a chosen distribution network configuration. This framework consists of four steps: (i) Characterizing the configuration of the current supply chain network, (ii) Defining alternatives for multi-echelon inventory systems, (iii) Defining selection criteria based on supply chain strategy and consumers priorities and (iv) Rating and selecting the appropriate multi-echelon inventory system based on an appropriate decision making method while taking into account decision makers preferences.