Reduction Of Inventory Levels Research Articles

Impact of just‐in‐time inventory systems on OEM suppliers

PurposeTo analyze the impact of the adoption of just‐in‐time (JIT) production systems by different equipment manufacturers (OEMs) on the inventory profiles of their suppliers.Design/methodology/approachThe research is designed to examine five financial measures of inventory management performance over the years 1994‐2004. Three specific industry sectors where OEMs have adopted and implemented JIT principles are studied. These sectors include the automotive, electronics, and aircraft industries. A one factor analysis of variance is employed to the five hypotheses and Tukey's post‐hoc test is used to interpret statistical pairwise differences between level means.FindingsOverall, the research finds that OEM suppliers in the automotive, electronics, and aircraft sectors have shown mixed results in the impact JIT implementation has had on inventory performance measures.Research limitations/implicationsThe research focuses on three industrial sectors over approximately a ten year time frame that may limit its generalizability.Practical implicationsThe processes that influence the reduction in inventory levels may be in fact more complex and strategic in nature than an OEM adopting a JIT inventory policy. In general, strategic changes within the supplier organization would have to drive process improvements that lead to inventory reductions.Originality/valueThe paper provides focused research in an area that has received little attention in the current literature and is very topical to all academics and business professionals interested or involved in the area of JIT systems.

Modelling the benefits of information sharing-based partnerships in a two-level supply chain

This paper presents a study aimed at quantifying the benefits of information sharing-based supply chain partnerships. We derive the optimal inventory policies for the manufacturer and the retailer in a two-level decentralized supply chain under different information sharing scenarios. We show that increasing information sharing among the members in a decentralized supply chain will lead to Pareto improvement in the performance of the entire chain. Specifically, the manufacturer can obtain benefits in terms of reductions in inventory levels and cost savings.

Adoption of efficient consumer response: the issue of mutuality

The adoption of efficient consumer response (ECR) has been slow in many regions, despite its many potential benefits to supply chain participants through reduction of inventory level and operating costs. There has not been any well‐developed theory that can explain this slow uptake. Argues that the inherent characteristics of ECR have actually created barriers to its own adoption. As an inter‐organisational system (IOS), ECR adoption requires co‐operation and trust between trading partners, which are unlikely to happen unless costs, benefits and risks of ECR implementation can be mutually shared. Shows, using a case study conducted within one supply chain, that an unequal distribution of costs, benefits and risks among manufacturer, distributor and retailer is inherent in the implementation of cross‐docking, which typifies the overall ECR program. The findings of this study lead to a new direction in understanding the barriers to adoption of ECR and IOS in general.

Benefits of information sharing with supply chain partnerships

The power of information technology can be harnessed to help supply chain members establish partnerships for better supply chain system performance. Supply chain partnerships can mitigate deficiencies associated with decentralized control and reduce the “bullwhip effect”. This study illustrates the benefits of supply chain partnerships based on information sharing. For a decentralized supply chain comprising a manufacturer and a retailer, we derive the members’ optimal inventory policies under different information sharing scenarios. We show that increasing information sharing among the members in a decentralized supply chain will lead to Pareto improvement in the performance of the entire chain. Specifically, the supply chain members can reap benefits in terms of reductions in inventory levels and cost savings from forming partnerships with one another. A case study is provided for illustration.

Information Technology and Its Impact on Productivity: Firm-Level Evidence from Government and Private Data Sources, 1977-1993

Robert Solow's quip that see computers everywhere but in the productivity statistics has prompted a large and growing literature examining the Information Productivity Paradox. Some aggregate and industry-level studies have failed to detect a positive contribution to productivity growth from investments in computer technology.' More recent studies utilizing firm-level data, however, have detected a significant contribution.' This paper confirms the results of these latter studies using U.S. firm-level computer asset and financial data for nonagricultural firms during the period 1977-1993 from a variety of data sources including the U.S. Census Bureau's Enterprise and Auxiliary Establishment Surveys, Compustat, and Computer Intelligence Infocorp, a market research firm. Our principal finding, that computers--especially personal computers--do contribute positively to productivity growth, suggests that the traditional Information Productivity Paradox is largely a measurement problemn. This is closely related to the more general problem of assessing service sector productivity, because computers are used most intensively in the service sector and in the 'service' functions of non-service sector firms (e.g., payroll and purchasing). As Zvi Griliches (1994) noted, these activities pose the greatest problems for output and productivity measurement. Moreover, although we may see computers everywhere, they represent only a tiny fraction of capital stock (on about 2% of plant, property and equipment), so aggregate effects may be hard to detect (Oliner and Sichel 1993). Our data indicate that computers not only contributed to productivity growth during the period 1977-1993, but they yielded excess returns relative to other types of capital. The data also suggest that computer productivity peaked around 1986/1987,3 that computers are complementary with skilled labour (Krueger 1993 and Autor, Katz and Krueger 1997), and that use of computers may permit reductions in inventory levels. Finally, and perhaps most interesting, the evidence

A large scale simulation model for analyzing the production of pipe valves and fittings

This paper describes a large-scale SLAM II- FORTRAN simulation model of a manufacturing plant that produces pipe valves and fittings. The model represents the functional areas of manufacturing (machining, heat treating, electropolishing, assembly, test and material movement) as well as the production planning and control system. The model allows for experimentation in a variety of areas, including production control, capacity planning, and layout design. Results of model experimentation indicate the advantages of conversion to a new single- floor facility over the existing multi-floor facility, as well as the advantages of a reduction in inventory levels for the plant.