A reply to Colin Eden:
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Stock control Opportunities beyond the text book
Ian Fleming 3:1 for current computer systems in distribution; future plans indicate that the use of 'off the shelf' packages is reducing. Currently most systems (c 70%) are to be found on mainframe computers
Stock control is almost a mandatory chapter of OR
text books, yet remains a tool that practitioners
seemingly leave permanently in their toolbox. This article examines the case for greater involvement from the OR community and suggests themes and
(ILDM 1991/92 Survey of Distribution Costs).
stalling points for development.
In-house systems are frequently written solely by
Inventory control and related topics generally account for a relatively high percentage of the
data processing personnel with little or no input from an OR department. What the programmer views as a mere few lines of code can often have a dramatic
ing in Operational Research and Management
company. In my experience 'stock control' procedures within systems are often cobbled together by reference to (and frequently incorrect interpretation
and practitioner usage, in what is a fairly mature
When OR departments are consulted, their contribution is often taken as if written in stone. As the systems production cycle slowly unfolds, such factors
impact on the working capital available to the
papers published annually by the recognised scientif ic journals. Yet despite both this, and the continued prominence given to stock control and forecastScience academic courses, a survey of OR Society members placed inventory control only eleventh in a list of modelling areas ranked by frequency of use. This apparent gap between academic development
of) basic text books.
as smoothing parameters and service levels are hard-coded into the systems for all eternity. The system is finally implemented, long after the OR analyst has left for new shores, and in a business
area, appears to be one of application rather than a lack of ideas.
There is ample evidence that inventory control is a primary function in many manufacturing, distribution and retail/wholesale companies. Storage and inventory represent an average 60% of total distribution costs, this percentage being appreciably higher in the retailing of consumer goods (Institute of Logistics and Distribution Management 1991/92 Survey of
environment that may have radically changed.
Proprietary (packaged) software is not the panacea your friendly account manager would have you believe. The fact that the package is supplied by a top computer manufacturer is no guide to its performance - one such package, which has only recently been revised, implemented some rather elementary theory quite incorrectly. When choosing a package,
Distribution Costs).
Having established the apparent lack of penetration of OR into the field of stock control and demonstrat-
the prospective purchaser should focus on their
ed the potential size of the market, what practical
distinct business needs. For example, if yours is a highly seasonal business, place the emphasis
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