Exploring the Impact of Business Infrastructure on a Multi-Echelon Inventory Control System
(2024) MIOM05 20241Production Management
- Abstract (Swedish)
- Inventory management is crucial for organizations, with inventory control being a key component. Efficient inventory control involves balancing various business functions' goals, while also managing economies of scale (EOS) and uncertainties. Multi-echelon inventory control systems (MEICS) consider interdependent stocks and have gained importance with advancements in inventory control techniques. MEICS are particularly significant in industries dealing with perishable goods due to their complexity and high integration needs.
The performance of inventory control systems (ICSs) depend not only on technical aspects but also on organizational context. This thesis explores a large grocery retailer's MEICS, considering both technical aspects... (More) - Inventory management is crucial for organizations, with inventory control being a key component. Efficient inventory control involves balancing various business functions' goals, while also managing economies of scale (EOS) and uncertainties. Multi-echelon inventory control systems (MEICS) consider interdependent stocks and have gained importance with advancements in inventory control techniques. MEICS are particularly significant in industries dealing with perishable goods due to their complexity and high integration needs.
The performance of inventory control systems (ICSs) depend not only on technical aspects but also on organizational context. This thesis explores a large grocery retailer's MEICS, considering both technical aspects and organizational context. Drawing from de Vries (2005), it aims to analyze the Company's MEICS functionality and identify organizational factors affecting its performance.
This master's thesis uses an embedded single-case study, combining interviews and archival records from the Company. It begins by understanding theoretical concepts and the Company's MEICS, then combines quantitative and qualitative data analysis. Finally, the thesis culminates in a cross-analysis, between the exploratory findings and established theory.
The study finds excessive inventory levels but low availability for the products. This discrepancy may be due to inventory levels being presented weekly in the thesis while availability is measured daily by the Company. The analyzed RDC exceeds the Company's inventory turnover rate goal, which may not accurately reflect market conditions since it is set globally.
The study reveals numerous potential underlying reasons for this outcome, including a complex organizational structure, misaligned objectives, inadequate definitions and measurements of KPIs, insufficient information sharing, an ERP system that lacks integration of the multi-echelon aspect of its inventory setup, and differing levels of system knowledge among users. According to established theory, these components of business infrastructure are considered to degrade the efficiency of the Company's MEICS, which is potentially the cause of the observed excessive inventory levels and suboptimal performance in terms of availability and inventory turnover rate. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9158694
- author
- Bäcklin, Linn LU and Gullberg, Emma LU
- supervisor
- organization
- course
- MIOM05 20241
- year
- 2024
- type
- H2 - Master's Degree (Two Years)
- subject
- keywords
- Supply Chain Management, Inventory Control, Multi-Echelon, Business Infrastructure
- other publication id
- 24/5279
- language
- English
- id
- 9158694
- date added to LUP
- 2024-08-28 10:49:30
- date last changed
- 2024-08-28 10:49:30
@misc{9158694,
abstract = {{Inventory management is crucial for organizations, with inventory control being a key component. Efficient inventory control involves balancing various business functions' goals, while also managing economies of scale (EOS) and uncertainties. Multi-echelon inventory control systems (MEICS) consider interdependent stocks and have gained importance with advancements in inventory control techniques. MEICS are particularly significant in industries dealing with perishable goods due to their complexity and high integration needs.
The performance of inventory control systems (ICSs) depend not only on technical aspects but also on organizational context. This thesis explores a large grocery retailer's MEICS, considering both technical aspects and organizational context. Drawing from de Vries (2005), it aims to analyze the Company's MEICS functionality and identify organizational factors affecting its performance.
This master's thesis uses an embedded single-case study, combining interviews and archival records from the Company. It begins by understanding theoretical concepts and the Company's MEICS, then combines quantitative and qualitative data analysis. Finally, the thesis culminates in a cross-analysis, between the exploratory findings and established theory.
The study finds excessive inventory levels but low availability for the products. This discrepancy may be due to inventory levels being presented weekly in the thesis while availability is measured daily by the Company. The analyzed RDC exceeds the Company's inventory turnover rate goal, which may not accurately reflect market conditions since it is set globally.
The study reveals numerous potential underlying reasons for this outcome, including a complex organizational structure, misaligned objectives, inadequate definitions and measurements of KPIs, insufficient information sharing, an ERP system that lacks integration of the multi-echelon aspect of its inventory setup, and differing levels of system knowledge among users. According to established theory, these components of business infrastructure are considered to degrade the efficiency of the Company's MEICS, which is potentially the cause of the observed excessive inventory levels and suboptimal performance in terms of availability and inventory turnover rate.}},
author = {{Bäcklin, Linn and Gullberg, Emma}},
language = {{eng}},
note = {{Student Paper}},
title = {{Exploring the Impact of Business Infrastructure on a Multi-Echelon Inventory Control System}},
year = {{2024}},
}