E-Supply Chain Technologies & Applications
EBC 6230 – Winter Session 2014
Title : Inventory Management in SCM
Dr. Mohamed Baymout
Anil Momin – 7037681
Alaa Alharbi - 6689773
Anil Momin – 7040551
1. Traditional SCM vs e-SCM
2. Inventory Management
3. Role of Inventory Management in SCM
4. Impact of e-SCM in Inventory Management
5. Methods for effective inventory Management.
6. Tools used for managing inventory
7. Case Study - Domino Pizza
9. Possible Solution
Traditional SCM vs E- SCM
Supply chain management (SCM) is the process of coordinating
and optimizing the flow of all products or service, information and
finances among all players of the supply chain, from raw material
provider to the end consumer.
E–Supply chain is a system which manage inventories based on
electronic Web technologies using internet.
Difference between SCM & e-SCMThe main difference between traditional and modern supply
chain management approaches is in how the activities in the
processes are interconnected.
“Inventory management is the process
that identify the amount and the position of
the goods that a firm used in their product”
Role of Inventory Management System
in The role of inventory in the supply chain is to bridge the difference
between demand and supply.
Inventory management helps a business achieve several goals:
satisfy demand but ensuring commensurate product availability and
minimize costs by capitalizing on economies of scale
Inventory management help in creating a balance between
availability and efficiency
Impact of E-SCM on Inventory Management
JIT bring more efficiency and better customer satisfaction in the
Just in Time inventory Management:
Components arrives as they are needed.
Shorten Lead Times
Integrate all supplier with SCM System
Reduce holding cost
Methods to Manage Inventory for
Lead time should be appropriate
Monitor inventory levels
Inventory Management Systems (e.g ERP inventory
Modules like Procure to Pay and Order to Cash)
Tools for Managing Inventory
Economic Order Quantity
Economic Order Quantity -EOQ
Developed by Ford.W Harrison in 1913.
It identify the order size.
It minimize total ordering cost and holding cost.
Ordering Cost is Constant.
Rate of demand is known
Lead time is fixed
Only one product is involved.
It identifies a certain point when to order inventory.
It help orgainsation to avoid running out of stock.
Reorder point can be identify by two method
Continuous Review System
Periodic Review System
Additional Inventory to meet average demand during lead time.
It protects companies from any uncertainty in demand and lead
Balance the cost of stockout against the holding cost of extra
Case Study - Domino’s Pizza
Domino’s Pizza started its operation in 1960.
In Sep, 2012 they achieve 10,000 outlets in the world.
In 1999 Company sold 360 Million Pizza in USA market and
reached $3.36 Billion in sales.
They have 18 distribution centers which cover 4,500 outlets.
Issues in maintaining stock.
Issues of vendor Ordering.
Orders requirement of Outlets.
Not following a safety stock procedure.
Expire product inventory Issues.
Implement a e-SCM system.
Formulate Inventory System.
Formulate Ordering System.
Generate safety stock.
Forecast requirement of inventory.
Integrate store inventory system with sales.
“Effective E-SCM techniques can play vital role in
managing the business efficiently and it also provide
opportunity to create better business relations with
outside suppliers and departments within the
Methods to manage: