Inventory record inaccuracy – The impact of structural complexity and lead time variability

Abstract

This article presents a rigorous prospective analysis of the impact of Inventory Record Inaccuracy (IRI) on complex multi-echelon Supply Chains (SCs). Specifically, key operational factors (i.e., the magnitude of the error, frequency of the inventory audits and lead time variability) and SC structure are systematically assessed. We find that the detrimental effects of IRI are exacerbated by the structural complexity of the SC and lead time variability. Furthermore, we show how the efficacy of countermeasure strategies may vary depending on SC configuration and operational conditions. These results allow us to provide interesting managerial recommendations to guarantee investment in prevention and correction strategies.