The effect of inventory record inaccuracy in information exchange supply chains

The goal of this paper is to quantify the impact of Inventory Record Inaccuracy on the dynamics of collaborative supply chains, both in terms of operational performance (i.e. order and inventory stability), and customer service level. To do so, we model an Information Exchange Supply Chain under shrinkage errors in the inventory item recording activity of their nodes, present the mathematical formulation of such supply chain model, and conduct a numerical simulation assuming different levels of errors. Results clearly show that Inventory Record Inaccuracy strongly compromises supply chain stability, particularly when moving upwards in the supply chain. Important managerial insights can be extracted from this analysis, such as the role of 'benefit-sharing' strategies in order to guarantee the advantage of investments in connectivity technologies

BUSINESS VALUE OF SMART CONTRACT: CASE OF INVENTORY INFORMATION DISCREPANCIES

Firms are increasingly interested in Blockchain Smart Contracts as a solution for the visibility of the digital supply chain. Blockchain can help realize the cost reductions by providing a “single version of the truth” for a firm and its trading partners. By sharing important information such as inventory levels, manufacturing performance and operations indicators, and order and shipment information, firms can eliminate the delays and uncertainties in the information that contributes to “the bullwhip effect” and inflates required buffer stock. This paper focuses on the impact of blockchain in an inventory operation to cope up with information discrepancies. We present and compare the cost differences between an existing technology (like EDI) and blockchain. Using technologies like blockchain and smart contracts will enable a more transparent, sustainable, and resilient supply chain

Inventory record inaccuracy in supply chains: the role of workers’ behavior

Purpose This research aims at exploring the effect of inventory record inaccuracy due to behavioral aspects of workers on the order and inventory variance amplification. Design/methodology/approach We adopt a continuous-time analytical approach to describe the effect of inbound throughput on the inventory and order variance amplification due to the workload pressure and arousal of workers. The model is numerically solved through simulation and results are analyzed with statistical general linear model. Findings Inventory management policies that usually dampen variance amplification are not effective when inaccuracy is generated due to workers’ behavioral aspects. Specifically, the psychological sensitivity and stability of workers to deal with a given range of operational conditions have a combined and multiplying effect over the amplification of order and inventory variance generated by her/his errors. Research limitations/implications The main limitation of our research is that we model workers’ behavior by inheriting a well-known theory from psychology that assumes a U-shaped relationship between stress and errors. We do not validate this relationship in the specific context of inventory operations. Practical implications The paper gives suggestions for managers who are responsible for designing order and inventory policies on how to take into account workers’ behavioral reaction to work pressure. Originality/value The logistics management literature does not lack of research works on behavioral decision making causes of order and inventory variance amplification. Contrarily, this paper investigates a new kind of behavioral issue, namely the impact of psycho-behavioral aspects of workers on variance amplification

The diffusion and impact of radio frequency identification in supply chains : a multi-method approach

As a promising and emerging technology for supply chain management, Radio Frequency Identification (RFID) is a new alternative to existing tracking technologies and also allows a range of internal control and supply chain coordination. RFID has generated a significant amount of interest and activities from both practitioners and researchers in recent years. However, the factors important for its diffusion in supply chains and the impact on supply chain performance have not been well understood. Many organizations are reluctant to participate in supply-chain level RFID projects because of this lack of understanding. My dissertation proposes to help understand RFID's use in supply chains through a multi-method approach - an empirical study to understand the diffusion and impact of RFID and a simulation study to understand RFID's impact on inventory accuracy in supply chains. My first study on the factors influencing RFID adoption decision showed that compatibility, trading partner's RFID capability, trading partner power, competitive pressure, transaction volume and financial resources are significant factors for RFID adoption in a supply chain context. The second study which looked into the post-adoption use of RFID for supply chain has found that adoption cost, complexity, organizational readiness, external pressure and trading partner readiness significantly influence RFID infusion, which finally improves firm's supply chain process performance. The third study used a simulation model to examine RFID's impact on inventory management in supply chains. The key findings were that the benefits reaped from RFID heavily depend on product type which implements RFID. The above findings indicate that organizations have to carefully evaluate their RFID project with different factors identified in this dissertation to successfully implement RFID and derive its full benefits. My dissertation has contributed to RFID research in particular, and supply chain technology adoption in general, by showing the importance of trading partner issues for supply chain technology diffusion and use

Periodic Replenish and Recount Policy to Address Record Inaccuracy from Stock Loss

Inventory record inaccuracy (IRI) often arises in retail environments due to unaccounted stock loss. Theft, misplacement, spoilage, and transaction errors will reduce the true inventory values without changing the inventory record. As previous inventory replenishment policies assume perfect record accuracy, increasing IRI can cause unexpected stockout events, mistimed reorders and replenishment freezes. Solutions to rectifying IRI vary from the use of improved tracking technologies to prevent it initially occurring at all to recounting programs which estimate true inventory value. Unfortunately, in retail environments, high‑tracking technology is unsuitable and continuous counting programs are too costly. To address the limitations of current solutions, we offer a Periodic Replenish and Recount Policy (PRRP) which accounts for stochastic stock loss and minimizes total costs including recounting. The theoretical foundation of PRRP allows for the discovery of both an optimal order quantity as well as optimal count frequency for a given inventory system. We find that in instances of stochastic stock loss, PRRP balances the trade-offs between shortage, surplus and counting costs

Supply chain risks: an automotive case study

The supply chain is a complex system exchanging information, goods, material and money within enterprises, as well as between enterprises within the value chain. An effective supply chain management contributes to large corporate profits and it is therefore a valid path to reinforce the enterprises' competitiveness. However, supply chain is exposed to influences from undesirable factors both from the outside environment and the entities in the chain. Moreover, industrial trends towards lean production, increasing outsourcing, globalisation and reliance on supply networks capabilities and innovations, increase the complexity of the supply chain . Therefore, managers need to identify, and manage risks, as well as opportunities, from a more diverse range of sources and contexts. This paper contributes to identify and categorise supply chain risks based on a literature study and an automotive manufacturer’s viewpoint. The empirical results indicate suppliers and raw material prices as the major internal and external potential risks

Patient Risk and Data Standards in Healthcare Supply Chain

Patient safety is one of the most important health care challenges. It is a big concern since 1 in every 10 patients around the world is affected by healthcare errors. The focus of this study is given to preventable adverse events that caused by the errors or system flaw that could have been avoided. In this study, simulation models are developed using Arena to evaluate the impact of GS1 data standards on patient risk in healthcare supply chain. The focus was given to the provider hospital supply chain operations where inventory discrepancy and performance deficiencies in recall, return, and outdate management can directly affect patient safety. Simulation models are developed for various systems and scenarios to compare different performance measures and analyze the impact of GS1. The results indicates that as the validation points are closer to the point of use, the number of recalled or outdated products administered to a patient are still reduced significantly so checking at the bedside or PAR is critical. But validation only at these points may cause some problems such as stock outs; therefore, validating in other locations is also needed

A systematic literature review on the benefit-drivers of RFID implementation in supply chains and its impact on organizational competitive advantage

Application of Radio Frequency Identification (RFID) in managing supply chains has witnessed significant interest in recent years. However, the current understanding of the potential benefits that act as the motivating factors/drivers in implementing RFID technology (benefit-drivers), its link to competitive advantage, is fragmented and scattered across the literature. This formed the motivation of this study which seeks to address this gap in the literature through a systematic literature review. Based on a rigorous screening of the literature (2006–2018), the study develops a comprehensive understanding of the various 1) corporate-driven and 2) customer-driven benefit-drivers from RFID implementation. The “2 C” categorization of benefit-drivers is novel and should provide more impetus for practitioners to leverage from RFID implementation. Further, the link between the benefit-drivers and competitive advantage is understood and proposed in the form of a conceptual framework. Finally, avenues for future research are highlighted. The study findings and the framework provide a good starting point for academics and practitioners to further explore the opportunities in supply chain afforded by RFID