Improvement of Material Flow in the Production and Supply Chain of ...

5.3.2 Inventory and suppliers’ selection
Under the circumstance of supply chain management, the ideal goal of inventory
management is managing to reduce the inventory with low cost as well as satisfy the
production and market requirement. Achieving an optimization is from both the area
of inventory control and supply chain management. Giannocaro et al. (2003) defined a
supply chain inventory management policy utilizing fuzzy set theory to model
uncertainty of demand and costs. Since inventory cost could up to seventy percentage
of the total cost of a production line, procedures that combine minimization of
inventories or inventory costs, and coverage of satisfactory service levels have
attracted significant attention (Skintzi et al., 2007).
Figure 5.6 Net Inventories in Supply Chain
One method to resolve the problem of inventory is sharing information among
cooperators. Traditionally, the management of information has been somewhat
neglected. Information management system is separate for different roles in the
supply chain. Now the global market develops increasingly. It is widely recognized
the importance of sharing information in the whole supply chain. More and more
cases prove that advancements of technologies in the fields of information,
manufacturing, and distribution systems have driven much change through the supply
chain. Especially, improving information technology enable follow instantaneous
global information sharing with more powerful information processing (Byrne &
Heavey 2006). Figure 5.6 (Machuca & Barajas, 2004) shows the inventory problem
clearly. This is also a performance of Bullwhip Effect, which is caused by lack of
information sharing.
For the factory, selecting a supplier who can share information effectively and
efficiently in the supply chain is necessary and important to solve the inventory
problem. Come to the situation of Haldex, the problem is that there is no enough space
to deposit the products. This problem can be solved from several points of view, for
example, reducing the warehouse occupancies from both raw material and finished
46