On the Economic Value of Supply Chain Visibility: The Example of Improved Emergency Ordering
نویسندگان
چکیده
Location technologies such as GPS or GSM cell tracking can be used to improve the control of production and transport processes along the entire supply chain. In this paper, we particularly consider the benefits of location systems with regard to supply chain visibility for improving emergency ordering decisions. For this purpose, we first present an overview of the underlying base technologies that can be used for supply chain monitoring today and a review of prior research on inventory control with emergency ordering. With the help of a simulation model, we show that higher supply chain visibility can be used to identify and avoid unnecessary emergency orders, resulting in cost savings for the overall inventory system. In addition, we identify optimal levels of supply chain granularity and discuss why the maximum resolution that may be achievable from a technological perspective does not necessarily lead to cost-optimal results.
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