Replacing Inventory: An Information Based Strategy for Competitive Advantage in Supply Chain Management
Review of Business Research, Vol. 7, No. 3, pp. 148-157, 2007
17 Pages Posted: 24 May 2008
Date Written: October 13, 2007
Abstract
This paper resulted from a study on "The Effects Of Workflow Automation On Supply Chain Customer Synchronization In The Discrete Manufacturing Industry"(Borgman & Wilfred, 2007). Becoming Agile and Lean in manufacturing necessitate that we revisit the way we handle our factors of productions (i.e. man, machine and materials). Most current literature acknowledges that of all the production factors, Inventory is the "low hanging fruit" for improvement. Whilst Inventory has been labelled a liability, why has so little been achieved to managing Inventory and realising the benefits in practice? Our findings guided us towards a proposition for Replacing Inventory with Information. By applying ICT (Information & Communication Technology) based solution to the "Response Time Delay" and "Risk of Uncertainty of Demand" problems, seen here as a dynamic Inventory problem. We were able to develop a framework to determine when Inventory can be replaced with information and when it should not be attempted.
Keywords: Uncertainty, Throughput, Synchronization
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