Investigating the value of reducing errors in inventory information from a supply chain perspective

Abstract

Purpose

The purpose of this paper is to investigate the value of reducing errors in inventory information from a supply chain perspective. To this end, the benefits of reducing errors in inventory information are compared with those of lead time reduction and supply chain collaboration.

Design/methodology/approach

A simulation model is constructed to perform the analysis.

Findings

Results show that lead time reduction is the most important strategy for a supply chain in reducing total supply chain cost. In terms of customer service level, on the other hand, strategy of reducing errors in inventory information is observed as the most considerable strategy. However, the results for supply chain collaboration are somewhat unexpected. Namely, in spite of its popularity, supply chain collaboration provides very limited contribution to the supply chain.

Practical implications

This research provides useful knowledge for the managers of a business enterprise in prioritizing various supply chain strategies.

Originality/value

In supply chain management literature, greater emphasis is given to lead time reduction and supply chain collaboration than dealing with errors in inventory information. This research makes it clear that errors in inventory information should not be underestimated.

Citation

Sari, K. (2015), "Investigating the value of reducing errors in inventory information from a supply chain perspective", Kybernetes, Vol. 44 No. 2, pp. 176-185. https://doi.org/10.1108/K-06-2014-0113