Abstract
With the rapid development of information and communication technologies, inventory information sharing between a manufacturer and its suppliers is becoming easier than ever. In line with this trend, we focus on the virtual warehouse where only inventory information on all of the material provided by the suppliers can be stored and shared. Unlike traditional supplier management, the manufacturer constructs and operates this virtual warehouse to check the inventory levels of all the required material at the same time, but each supplier can access only the information about its inventory. This virtual warehouse-based approach can foster a tight relationship between the manufacturer and its suppliers and can handle suppliers as a single company without a large investment in constructing a physical warehouse. The virtual warehouse-based approach seems to be more economically sustainable. To investigate the effect of inventory information sharing via the virtual warehouse, we developed and analyzed a system dynamics-based simulation model. The experiment results show that sharing the inventory information of the suppliers via the virtual warehouse can help manufacturers to achieve better operational performance on several important measures, such as the reduction of finished goods inventory, parts purchasing quantity, degree of backlogs, and total cost.
Highlights
Recent developments in information and communication technologies have facilitated collaboration among business partners, such as manufacturers and suppliers
Vendor-managed inventory (VMI), another product development [9,10,11], while others tried to identify the benefits of such a partnership using various interviews and case studies [12,13]
Tako and Robinson [32] investigated the application of both discrete-event simulation (DES) and SD in the logistics and supply chain context, and they classified the issues in the supply chain into either the strategic/policy or operational/tactical group
Summary
Recent developments in information and communication technologies have facilitated collaboration among business partners, such as manufacturers and suppliers. Suppliers have an interest in maintaining a proper level of material inventory to support their customers (i.e., manufacturers) In the past, it was difficult for both a manufacturer and its suppliers to share information in real-time due to high investment costs or a lack of related technologies. Howoweveevre, ri,ninmmanaynystsutduideise, sp, apratnrtenresrhsihpipisiosfoteftnenamambibgiugouuosuasnadndhahsabsebeenendedsecsricbreibdedin indidffiefrfeernetnwt wayasysfrformomstsrtartaetgeigcicppeersrpspecetcitviveses[8[8].].SSoommeerreesseeaarrcchhffooccuusseedd oonn tthhee ppaarrttnneerrsshhiipp ffoorr nneeww product development [9,10,11], while others tried to identify the benefits of such a partnership using various interviews and case studies [12,13]. Vendor-managed inventory (VMI), another interesting collaboration between a manufacturer and a supplier, has been initiated to reduce inventory costs and to increase fill rates [14]. There is a lack of research on inventory information sharing between a manufacturer and its suppliers via a (manufacturer-driven) VW shared by the suppliers
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