Supply Chain Innovation for Parts Inventory Optimisation

The Ph.D. project focuses on spare parts supply chain optimisation and it is related to the innovation of a European spare parts Supply Chain. The project first focused on the single warehouses, and then a global perspective was taken, looking at the whole supply chain. In the local perspective, the optimisation of the operational processes was considered. The objective was the improvement of the service level/inventory trade-off. Three main phases of the inventory management have been considered: the forecasting process (i.e., the methods used to predict future unknown demand), the planning process (i.e., setting inventory targets and issuing replenishment orders to suppliers) and the allocation process (i.e., giving the available inventory to customers according to their orders and their priority). Various algorithms have been proposed to improve the single inventory for all the three phases, both for fast and slow moving products. In the global perspective, we studied the demand variability propagation in the supply chain (i.e., the Bullwhip Effect), which is one of the main causes of inefficiency and of cost increase. The identification of the bullwhip effect and of its potential influencing factors were the main topics we focused on, both from an empirical and a theoretical point of view. From the empirical standpoint, we proved that dealers tend to decouple supply and demand and, when they are given incentives to forward-buy, they may prefer to forward-buy fast moving items, especially during the switches from promotional to non-promotional periods. Instead, from the theoretical point of view, we proved that not knowing the demand process parameters increases the bullwhip effect. Also, an analytical approximation of the bullwhip was derived.