Old wine in new bottles?
Addressing the diversity of inventory management in supply chains from today’s perspective. “Plans are worthless, but planning is everything.” Dwight D. Eisenhower (1890 – 1969), army general and 34th US president.
The times of massive supply bottlenecks, not only for microchips, but also for many other products and fields, haven’t been long gone yet. The call to rebuild stocks – temporarily cited at almost any price – came rather quickly as well as loudly at the time.
Lean delivery concepts such as just-in-time, just-in-sequence or warehouse-on-wheels fell into disrepute overnight, as they were blamed for disruptions in global supply chains.
But what came next? As soon as the crisis subsided the bullwhip effect – well-known for more than 50 years now – set in. It saw strongly fluctuating and often delayed delivery volumes, which additionally were excessive, with the result that far too high inventories that could no longer be absorbed by markets were observed. Rather, projects were then initiated in many places to reduce inventories. These ups and downs of the last three to four years illustrate nicely the fact that stocks now receive more attention again in many industries and companies today, from many different perspectives.
It’s worth taking a look at the past first, because as early as the 1990s the core of inventory management was a component of logistics concepts.
At that time, for example, the focus was on questions relating to selecting suitable ordering procedures, the number of inventory-managed warehouses in distribution systems and on organisational responsibility for inventories in procurement, production as well as in distribution.
In many companies, the new position of an inventory manager was then created, which, as a cross-sectional function, also had a far-reaching influence on current assets and thus on the profitability of the company.
About 20 years ago then, with the advent of an approach that envisaged entire value networks – today’s ubiquitous supply chains – the focus gradually shifted to cooperation between several legally and economically independent companies in procurement, production and distribution.
In the wake of ongoing globalisation and the steadily increasing division of labour, the classic concepts, which had previously been related to individual companies, gave way to inter-company and, above all, process-oriented approaches.
Many new questions arose to manage inventories in supply chains. How can inventories be optimised in companies? Which players benefit from optimisation? Who pays for stocks? And how can we succeed in making an entire value-creation network resilient? So it’s time to rethink inventory management, at least in part.
This effort is supported by an anthology (in German) and presented recently by the publisher Versus Verlag, from Zurich (Switzerland), entitled “Management von Beständen in Supply Chains” (Managing Inventories in Supply Chains), which contains both academic and practical approaches to the topic.
These include, for example, the fields of action for and the methods of inventory management, practicable optimisation models that are supplemented by real-life concepts and case studies, as well as current development trends, in which the susceptibility of value-added networks to disruption is also addressed as concerns inventories.
Stölzle, Wolfgang / Hofmann, Erik / Selensky, Stefan / Germann, Tim (eds.): Management von Beständen in Supply Chains. 2nd, completely revised and heavily extended edition. Versus Verlag,
Zurich 2024.
ISBN 978-3-03909-174-4