An exploratory framework of the role of inventory and warehousing in international supply chains

Abstract

The aim of this paper is to explore the role of inventory and warehousing within international supply chains and, from this, to develop an exploratory framework that assists understanding in the area. The research is based on case studies of 13 supply chains in six companies, using pipeline mapping techniques, questionnaires, quantitative measures of lead times, and Likert scales to measure the perceptions of supply chain managers to risk. The results indicate that, for these case study supply chains, the supplier lead times were far in excess of the customer lead times and that, with the exception of new product lines, demand therefore needed to be supplied from inventory. In addition, inventory was a common risk mitigation strategy against the possibility of random demand variability and transportation delays. Based on these findings, an exploratory framework was developed to integrate such factors as inventory reduction strategies, risk management and inventory control theory. Further research is required to develop this exploratory framework in more detail so that it can help practitioners arrive at the most appropriate solutions. It is proposed that this is conducted initially in the fast moving consumer goods or retail sectors, so as to build on this research, and that this should include the upstream supply networks. Other types of industry sectors should then be explored. It is intended that the exploratory framework put forward in this paper can form the basis for further research in the area and to develop useful tools for practitioners. The literatures on inventory control theory and inventory reduction strategies have been largely separate to date. The findings of this paper lead to an exploratory framework to start to bring these areas together. © 2007, Emerald Group Publishing Limited