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Inventory Productivity Impacts of IT-Enabled Supply Chain Coordination in Manufacturing Environments

Inventory Productivity Impacts of IT-Enabled Supply Chain Coordination in Manufacturing Environments

Kristina Setzekorn, Arun Rai, Arlyn J. Melcher
Copyright: © 2003 |Pages: 39
ISBN13: 9781591400387|ISBN10: 1591400384|ISBN13 Softcover: 9781931777919|EISBN13: 9781591400882
DOI: 10.4018/978-1-59140-038-7.ch003
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MLA

Setzekorn, Kristina, et al. "Inventory Productivity Impacts of IT-Enabled Supply Chain Coordination in Manufacturing Environments." Creating Business Value with Information Technology: Challenges and Solutions, edited by Namchul Shin, IGI Global, 2003, pp. 50-88. https://doi.org/10.4018/978-1-59140-038-7.ch003

APA

Setzekorn, K., Rai, A., & Melcher, A. J. (2003). Inventory Productivity Impacts of IT-Enabled Supply Chain Coordination in Manufacturing Environments. In N. Shin (Ed.), Creating Business Value with Information Technology: Challenges and Solutions (pp. 50-88). IGI Global. https://doi.org/10.4018/978-1-59140-038-7.ch003

Chicago

Setzekorn, Kristina, Arun Rai, and Arlyn J. Melcher. "Inventory Productivity Impacts of IT-Enabled Supply Chain Coordination in Manufacturing Environments." In Creating Business Value with Information Technology: Challenges and Solutions, edited by Namchul Shin, 50-88. Hershey, PA: IGI Global, 2003. https://doi.org/10.4018/978-1-59140-038-7.ch003

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Abstract

This chapter describes an empirical analysis of the mediating effects of supply chain coordination strategy and manufacturing IT infrastructure on the relationship between business complexity and inventory turnover. Business complexity describes the diversity and volatility associated with a firm’s product markets. To cope with this complexity, firms deploy inventory buffers. This deployment should decrease inventory turnover.  An extensive manufacturing IT infrastructure can increase a firm’s “sense and respond” capability, reducing the need for buffers, and can thereby improve inventory turnover. As this technology enables enhanced coordination, and as firms’ efforts to reduce buffers within their own organizational boundaries earn diminishing marginal returns, firms attempt to optimize performance across organizational boundaries within the supply chain, i.e., adopt a cooperative supply chain coordination strategy. This supply chain coordination should improve inventory turnover.

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