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Article
Publication date: 14 November 2016

Sandeep Goyal, Bill C. Hardgrave, John A. Aloysius and Nicole DeHoratius

Perceived as an antidote to poor execution, interest in radio frequency identification (RFID)-enabled visibility has grown. The purpose of this paper is to examine whether…

Abstract

Purpose

Perceived as an antidote to poor execution, interest in radio frequency identification (RFID)-enabled visibility has grown. The purpose of this paper is to examine whether and how RFID-enabled visibility with item-level tagging improves store execution.

Design/methodology/approach

The authors conducted three field-based experiments in collaboration with two Fortune 500 retailers.

Findings

RFID-enabled visibility resulted in a sizable decrease in inventory record inaccuracy and out-of-stocks for inventory held in both the backroom and on the sales floor. The decrease in inventory record inaccuracy and out-of-stocks was even greater among products stored primarily on the sales floor suggesting the benefits from increased visibility accrue to sales floor inventory management processes. In contrast, the authors found no significant improvement in inventory record inaccuracy and no substantive improvement in out-of-stocks among products stored primarily in the backroom suggesting that increased visibility does not improve backroom management processes.

Practical implications

The authors recommend retailers focus on sales floor inventory management when seeking to improve store execution through the adoption of RFID-enabled visibility. In the context, only partial evidence exists that backroom inventory management improves with RFID-enabled visibility.

Originality/value

Retailers seeking to invest in RFID technology must estimate potential performance improvements before making firm-specific cost-benefit analyses. They must also understand where and how these performance improvements will accrue. This research uniquely presents the results of a three field experiments that quantify the changes in retail execution associated with RFID adoption.

Details

The International Journal of Logistics Management, vol. 27 no. 3
Type: Research Article
ISSN: 0957-4093

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Article
Publication date: 11 February 2019

Maria Drakaki and Panagiotis Tzionas

Information distortion results in demand variance amplification in upstream supply chain members, known as the bullwhip effect, and inventory inaccuracy in the inventory

Abstract

Purpose

Information distortion results in demand variance amplification in upstream supply chain members, known as the bullwhip effect, and inventory inaccuracy in the inventory records. As inventory inaccuracy contributes to the bullwhip effect, the purpose of this paper is to investigate the impact of inventory inaccuracy on the bullwhip effect in radio-frequency identification (RFID)-enabled supply chains and, in this context, to evaluate supply chain performance because of the RFID technology.

Design/methodology/approach

A simulation modeling method based on hierarchical timed colored petri nets is presented to model inventory management in multi-stage serial supply chains subject to inventory inaccuracy for various traditional and information sharing configurations in the presence and absence of RFID. Validation of the method is done by comparing results obtained for the bullwhip effect with published literature results.

Findings

The bullwhip effect is increased in RFID-enabled multi-stage serial supply chains subject to inventory inaccuracy. The information sharing supply chain is more sensitive to the impact of inventory inaccuracy.

Research limitations/implications

Information sharing involves collaboration in market demand and inventory inaccuracy, whereas RFID is implemented by all echelons. To obtain the full benefits of RFID adoption and collaboration, different collaboration strategies should be investigated.

Originality/value

Colored petri nets simulation modeling of the inventory management process is a novel approach to study supply chain dynamics. In the context of inventory errors, information on RFID impact on the dynamic behavior of multi-stage serial supply chains is provided.

Details

Journal of Modelling in Management, vol. 14 no. 2
Type: Research Article
ISSN: 1746-5664

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Article
Publication date: 3 November 2014

Manfredi Bruccoleri, Salvatore Cannella and Giulia La Porta

– The purpose of this paper is to explore the effect of inventory record inaccuracy due to behavioral aspects of workers on the order and inventory variance amplification.

Abstract

Purpose

The purpose of this paper is to explore the effect of inventory record inaccuracy due to behavioral aspects of workers on the order and inventory variance amplification.

Design/methodology/approach

The authors 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 the research is that the authors model workers’ behavior by inheriting a well-known theory from psychology that assumes a U-shaped relationship between stress and errors. The authors 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.

Details

International Journal of Physical Distribution & Logistics Management, vol. 44 no. 10
Type: Research Article
ISSN: 0960-0035

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Article
Publication date: 25 April 2008

Kazim Sari

This paper aims to explore the impact of inventory system inaccuracies on the benefits of collaborative supply chain practices under various supply chain scenarios. To…

Abstract

Purpose

This paper aims to explore the impact of inventory system inaccuracies on the benefits of collaborative supply chain practices under various supply chain scenarios. To achieve this purpose, two popular collaboration initiatives are considered in a four‐stage supply chain. The first practice is a vendor managed inventory program where the distributor takes the full responsibility of managing the retailer's inventory. The second practice is a collaborative planning, forecasting, and replenishment program where all members work together to plan, forecast, and replenish the product.

Design/methodology/approach

The study utilizes Monte Carlo computer simulation in an experimental design.

Findings

The analysis suggests that while the inaccurate inventory records result in significant performance reductions for all supply chain configurations, their impact is substantially greater for the supply chains where members collaborate more closely on key supply chain management activities. In addition, the author also realize that the adverse impact of inaccurate inventory information is stronger under the conditions where lead times are shorter and/or where demand uncertainty in market place is lower.

Practical implications

This analysis provides a means for practitioners to realize the importance of inventory accuracy to successful adaptation of collaborative supply chain practices. Moreover, this research also helps in understanding the supply chain conditions where the attempts of eliminating or reducing errors in inventory information are more crucial and more beneficial.

Originality/value

Although there is a range of research focusing on collaborative practices, none of these studies considered the errors in inventory information. This is the first study to investigate the impact of inaccurate inventory information on the benefits of collaborative practices.

Details

Industrial Management & Data Systems, vol. 108 no. 4
Type: Research Article
ISSN: 0263-5577

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Article
Publication date: 28 November 2019

Marc Morenza-Cinos, Victor Casamayor-Pujol and Rafael Pous

The combination of the latest advancements in information and communication technologies with the latest developments in AutoID technologies, especially radio frequency…

Abstract

Purpose

The combination of the latest advancements in information and communication technologies with the latest developments in AutoID technologies, especially radio frequency identification (RFID), brings the possibility of high-resolution, item-level visibility of the entire supply chain. In the particular case of retail, visibility of both the stock count and item location in the shop floor is crucial not only for an effective management of the retail supply chain but also for physical retail stores to compete with online retailers. The purpose of this paper is to propose an autonomous robot that can perform stock-taking using RFID for item-level identification much more accurately and efficiently than the traditional method of using human operators with RFID handheld readers.

Design/methodology/approach

This work follows the design science research methodology. The paper highlights a required improvement for an RFID inventory robot. The design hypothesis leads to a novel algorithm. Then the cycle of development and evaluation is iterated several times. Finally, conclusions are derived and a new basis for further development is provided.

Findings

An autonomous robot for stock-taking is proven feasible. By applying a proper navigation strategy, coupled to the stream of identifications, the accuracy, precision, consistency and time to complete stock-taking are significantly better than doing the same task manually.

Research limitations/implications

The main limitation of this work is the unavailability of data to analyze the actual impact on the correction of inventory record inaccuracy and its subsequent implications for the supply chain management. Nonetheless, it is shown that figures of actual stock-tacking procedures can be significantly improved.

Originality/value

This paper discloses the potential of deploying an inventory robot in the supply chain. The robot is called to be a key source of inventory data conforming supply chain management 4.0 and omnichannel retail.

Details

International Journal of Physical Distribution & Logistics Management, vol. 49 no. 10
Type: Research Article
ISSN: 0960-0035

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Article
Publication date: 28 September 2010

Daniel Hellström and Mathias Wiberg

This paper aims to explore and describe the impact of radio frequency identification (RFID) technology on inventory accuracy within a production and assembly plant, and to…

Abstract

Purpose

This paper aims to explore and describe the impact of radio frequency identification (RFID) technology on inventory accuracy within a production and assembly plant, and to propose a model for assessing the impact of the technology on inventory accuracy.

Design/methodology/approach

The empirical investigation, based on case study research, focuses on an RFID implementation at a supplier of injection‐moulded, surface‐treated plastic to the automotive industry. This implementation is one of the few item‐level, open‐loop RFID implementations in the automotive industry.

Findings

The empirical paper provides insights into, how inventory accuracy has been improved and made attainable in practice by implementing RFID, and indicates that the technology ensures inventory inaccuracy will be kept at a minimum. As a result, an analytical model is presented which identifies the impact of RFID technology on inventory accuracy.

Research limitations/implications

The case study and context need to be considered when generalising upon the findings. Furthermore, it is hoped future research could further develop the model presented and test it against implementation practice.

Practical implications

RFID technology provides practitioners with the opportunity to eliminate waste, and improve production and assembly performance. The research provides practitioners with experience of, and insights into how a production and assembly plant has improved inventory accuracy by implementing RFID technology. In particular, practitioners are provided with a model which enables them to assess the impact of RFID on inventory accuracy.

Originality/value

This paper contributes to the RFID community by providing empirical insights into the impact of RFID technology on inventory accuracy, but also more broadly into logistics and operations management research.

Details

Assembly Automation, vol. 30 no. 4
Type: Research Article
ISSN: 0144-5154

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Article
Publication date: 30 September 2019

Rafay Ishfaq and Uzma Raja

The purpose of this paper is to focus on the effectiveness of the inventory audit process to manage operational issues related to inventory errors in retail stores. An…

Abstract

Purpose

The purpose of this paper is to focus on the effectiveness of the inventory audit process to manage operational issues related to inventory errors in retail stores. An evaluation framework is proposed based on developing an error profile of store inventory using product attributes and inventory information.

Design/methodology/approach

A store inventory error profile is developed using data on price, sales, popularity, replenishment cycle, inventory levels and inventory errors. A simulation model of store inventory management system grounded in empirical data is used to evaluate the effectiveness of the inventory audit process in a high SKU-variety retail store. The framework is tested using a large transaction data set comprised of over 200,000 records for 7,400 SKUs.

Findings

The results show that store inventory exhibits different inventory error profile groups that would determine the effectiveness of store inventory audits. The results also identify an interaction effect between store inventory policies and replenishment process that moderates the effectiveness of inventory audits.

Research limitations/implications

The analysis is based on data collected from a single focal firm and does not cover all the different segments of the retail industry. However, the evaluation framework presented in the paper is fully generalizable to different retail settings offering opportunity for additional studies.

Practical implications

The findings about the role of different error profile groups and the interaction effect of store audits with inventory and store replenishments would help retailers incorporate a more effective inventory audit process in their stores.

Originality/value

This paper presents a novel approach that uses store inventory profiles to evaluate the effectiveness of inventory audits. Unlike previous papers, it is the first empirical study in this area that is based on inventory error data gathered from multiple audits that identify the interaction effect of inventory policy and replenishments on the inventory audit process.

Details

The International Journal of Logistics Management, vol. 31 no. 1
Type: Research Article
ISSN: 0957-4093

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Article
Publication date: 4 July 2016

Gülşah Hançerlioğulları, Alper Şen and Esra Ağca Aktunç

The purpose of this paper is to investigate the impact of demand uncertainty on inventory turnover performance through empirical modeling. In particular the authors use…

Abstract

Purpose

The purpose of this paper is to investigate the impact of demand uncertainty on inventory turnover performance through empirical modeling. In particular the authors use the inaccuracy of quarterly sales forecasts as a proxy for demand uncertainty and study its impact on firm-level inventory turnover ratios.

Design/methodology/approach

The authors use regression analysis to study the effect of various measures on inventory performance. The authors use a sample financial data for 304 publicly listed US retail firms for the 25-year period from 1985 to 2009.

Findings

Controlling for the effects of retail segments and year, it is found that inventory turnover is negatively correlated with mean absolute percentage error of quarterly sales forecasts and gross margin and positively correlated with capital intensity and sales surprise. These four variables explain 73.7 percent of the variation across firms and over time and 93.4 percent of the within-firm variation in the data.

Practical implications

In addition to conducting an empirical investigation for the sources of variation in a major operational metric, the results in this study can also be used to benchmark a retailer’s inventory performance against its competitors.

Originality/value

The authors develop a new proxy to measure the demand uncertainty that a firm faces and show that this measure may help to explain the variation in inventory performance.

Details

International Journal of Physical Distribution & Logistics Management, vol. 46 no. 6/7
Type: Research Article
ISSN: 0960-0035

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Article
Publication date: 6 June 2016

Issam Moussaoui, Brent D. Williams, Christian Hofer, John A. Aloysius and Matthew A. Waller

The purpose of this paper is to: first, provide a systematic review of the drivers of retail on-shelf availability (OSA) that have been scrutinized in the literature;…

Abstract

Purpose

The purpose of this paper is to: first, provide a systematic review of the drivers of retail on-shelf availability (OSA) that have been scrutinized in the literature; second, identify areas where further scrutiny is needed; and third, critically reflect on current conceptualizations of OSA and suggest alternative perspectives that may help guide future investigations.

Design/methodology/approach

A systematic approach is adopted wherein nine leading journals in logistics, supply chain management, operations management, and retailing are systematically scanned for articles discussing OSA drivers. The respective journals’ websites are used as the primary platform for scanning, with Google Scholar serving as a secondary platform for completeness. Journal articles are carefully read and their respective relevance assessed. A final set of 73 articles is retained and thoroughly reviewed for the purpose of this research. The systematic nature of the review minimizes researcher bias, ensures reasonable completeness, maximizes reliability, and enables replicability.

Findings

Five categories of drivers of OSA are identified. The first four – i.e., operational, behavioral, managerial, and coordination drivers – stem from failures at the planning or execution stages of retail operations. The fifth category – systemic drivers – encompasses contingency factors that amplify the effect of supply chain failures on OSA. The review also indicates that most non-systemic OOS could be traced back to incentive misalignments within and across supply chain partners.

Originality/value

This research consolidates past findings on the drivers of OSA and provides valuable insights as to areas where further research may be needed. It also offers forward-looking perspectives that could help advance research on the drivers of OSA. For example, the authors invite the research community to revisit the pervasive underlying assumption that OSA is an absolute imperative and question the unidirectional relationship that higher OSA is necessarily better. The authors initiate an open dialogue to approach OSA as a service-level parameter, rather than a maximizable outcome, as indicated by inventory theory.

Details

International Journal of Physical Distribution & Logistics Management, vol. 46 no. 5
Type: Research Article
ISSN: 0960-0035

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Article
Publication date: 8 May 2018

Norazira Abd Karim, Anuar Nawawi and Ahmad Saiful Azlin Puteh Salin

For a manufacturing company, inventory control and management is crucial to ensure smooth production and sustainable sales performance, as well as preventing stockout that…

Abstract

Purpose

For a manufacturing company, inventory control and management is crucial to ensure smooth production and sustainable sales performance, as well as preventing stockout that will result in customer switch to competitors. This paper aims to examine the effectiveness of cycle count activities, one of the inventory control tools to manage inventory. Beside, this study also wishes to identify any loopholes in practices and procedures in inventory control of companies.

Design/methodology/approach

One of the lubricant manufacturing companies in Malaysia was selected as a case study and mixed method data collection of document analysis and observation were used. The analysis and examination was conducted by using Committee of Sponsoring Organization of the Treadway Commission Framework 2013 as guidance.

Findings

This study found that problems in inventory control can be caused by inconsistency of practices due to incomplete or absent standard operating procedures. Furthermore, no segregation of duties and excessive reliance on one person to conduct many tasks will lead to human error and fraud.

Research limitations/implications

This paper enhances the theoretical understanding on the inventory control and management system applied in the manufacturing organization particularly. However, frequent changes of the management in the organization of the case study make the study difficult to obtain consistent information. Not all standard operating procedures were revised or updated and available for examination. In addition, some of the reports needed for investigation are confidential and requests to observe and scrutinize information from those documents are denied by the company. Thus, more in-depth analysis and verification on the issues of interest were unable to be conducted.

Practical implications

This study provides an indicator that cycle count activities need to be conducted frequently on a regular basis so that the physical inventory and recording system are accurate. Cycle count activities also must involves various related departments in the company in which regular training is essential to ensure employees are aware and understand their responsibility and accountability on the inventory.

Originality/value

This study is original as it focuses on the inventory control management of one of the largest lubricant manufacturing in Malaysia, particularly on cycle count activities which is scare in literature. Furthermore, the company allows research access to the documents and operations conducted in the company, which is usually difficult to obtain from many companies.

Details

Journal of Financial Crime, vol. 25 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

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