Abstract
Using the hand collected data of the top five clients of manufacturing enterprises in China, this paper examines the effect of customer geographic proximity on the inventory management level of manufacturing enterprises. The results show that there is a positive relation between the geographic proximity and inventory management level: the greater the geography proximity of customers, the lower the proportion of inventory, the higher the inventory turnover rate. This paper not only contributes to the literature on the factors affecting the level of inventory management and the supply chain management, but also provides reference on how the manufacturing enterprises can maintain the relationship with customers better, and improve inventory management efficiency.
Highlights
With the continuous advancement of global economic integration in the 1980s, and the continuous evolution of production and operation management theory, supply chain management has gradually emerged and been promoted
Using the hand collected data of the top five clients of manufacturing enterprises in China, this paper examines the effect of customer geographic proximity on the inventory management level of manufacturing enterprises
The results show that there is a positive relation between the geographic proximity and inventory management level: the greater the geography proximity of customers, the lower the proportion of inventory, the higher the inventory turnover rate
Summary
With the continuous advancement of global economic integration in the 1980s, and the continuous evolution of production and operation management theory, supply chain management has gradually emerged and been promoted. Customer geographic proximity can affect the level of inventory management through information exchange and cooperation. When the geographical proximity of a enterprise and its customers is high, enterprises can use “local advantages” to collect more private information about customer needs and volatility, so as to arrange procurement and production more effectively, and improve inventory management. Based on the above research background, this paper uses the manually collected data of the top five customers of China’s manufacturing enterprises to examine the impact of customer geographic proximity on inventory management level of manufacturing enterprises. This paper studies the influence factors of inventory management based on the customer geographic proximity, and extends from the single dimension of customer concentration to the dimension of geographical location. The rest of this paper is arranged as follows: the second part is literature review and research hypothesis; the third part is the research design of this paper; the fourth part is the empirical results; the fifth part is the conclusions
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