Inventory control supply chain management

Krenek MR (1997) Improve global competitiveness with supply-chain management - Manufacturers must rethink how, when, where and why they produce goods. Hydrocarbon Processing 76 (5) 97-100 Krever M, Wunderink S, Dekker R, Schorr B (2005) Inventory control based on advanced probability theory, an application. European Journal of Operational Research 162 (2) 342-358... 

Non-conflicting and unambiguous accountabilities are key to success. Supply chain managers are often held responsible for inventory levels but are unable to influence production lot sizes, which are normally under the control of the production managers responsible for production costs. As lot size adversely affects inventory levels and production costs, this is a common example of conflicting and ambiguous accountabilities, where responsibilities are not backed up by con-... 

In Chap. 2, we dealt with topics in supply chain management. Supply chain management comprises decision making about facility location, production, transportation, and inventory control. Many companies employ optimization as a decision making tool. Here, we will introduce important and core optimization models and solution strategies for some important supply chain problems. 

Supply chain management is performed within a two-layered approach. The first layer aims at keeping inventory levels around pre-specified targets. A single dedicated controller is used for each inventory node. Disturbances are generated by demand fluctuations at downstream nodes. 

A two-layered control strategy was described for supply chain management purposes. The strategy combines feedback controllers to account for the fast dynamics at the inventory nodes, while utilising the power of a fiilly-centralised optimisation-based model predictive controller to achieve an optimal operating policy for the supply chain network over a selected time horizon. 

Avoid control systems, focus on reducing inventories in the supply chain, manage the capacities of the supply chain, and optimize the supply chain flow so as to maximize customer satisfaction. 

Vollman, T.E., Berry, W.L., Whybark, D.C. and Jacobs, F.R. (2005) Manufacturing Planning and Control for Supply Chain Management, 5tb edn. New York McGraw Hill/Irwin. Waters, D. (2003) Inventory Planning and Control. Jobn Wiley and Sons Ltd. 

Maloni M, Benton WC (1999) Power influences in the supply chain. The Ohio State University, Fisher College of Business Mandal P, Gunasekaran A (2002) Application of SAP R/3 in on-line inventory control. International Journal of Production Economics 75 47-55 Mam MV, Rosiello RL (1992) Managing Price, Gaining Profit. Harvard Business Review 70 (5) 84-94... 

The synchronized supply chain has been tested repeatedly and it does address the more common problems of the traditional approach. The key is communication from the market. Material and information is released into the system based on the consumption at the primary control point. Every supplier of raw material as well as every producer along the supply chain is linked to that actual demand. Strategically sized and located buffers of inventory are designed to absorb the unpredictable variability, and sufficient protective capacity is planned to maximize the velocity of the product flow. As a result, the waves of demand are avoided and the productivity of the entire system is made much more predictable. As well, the properly synchronized system is more stable and easier to manage. 

Shilei Yang is a PhD candidate in operations management at Washington State University (USA). His BS in management science and BE in computer science are from University of Science and Technology of China. Then he obtained his MA in economics and MS in mathematics from Middle Tennessee State University (USA). His primary research interests include supply chain coordination, inventory control, and optimization. 

Often it is the economics implicit in the FOQ equation, or a similar thought process, that governs decisions such as those made by production control and transportation managers up and down the supply chain. The company selling to the final customer orders material in fixed amounts from suppliers according to reorder points and minimum order quantities. Others back up the chain duplicate the behavior, leading to a supply chain bloated with extra inventory and operating expense. 

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