Exploring the insights of a consignment stock program implementation in a leagile supply chain

Abstract

Supply chain performance, in terms of total cost, service level and delivery lead-time is an extremely important objective in an organization, being directly linked to inventory management. Therefore, well managed inventory is a main trigger to increasing profitability. In this regard, the present study attempts to explore the readiness of a leagile manufacturing company to embrace consignment stock model, in order to reduce inventory value for raw materials and packaging, as well as to avoid forecast accuracy problems and cash-flow issues. The methodology includes a brief analysis of different types of inventory models, focusing on consignment stock approach and proposes an exploratory case study, represented by a successful implementation of a consignment stock program in a multinational company, having already leagile prerequisites. Using as a basis the insights and learning from the real case, the aim of the study is to develop a business processes framework, accommodated with the IT support software, to serve as a guideline for future implementation of such programs.