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Operational safety: The hidden cost of supply-demand mismatch in fashion and textiles related manufacturers

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  • Fan, Di
  • Zhou, Yi

Abstract

Inventory management is a focus for operations management scholars and operations managers. Previous literature mainly investigated the relations between firm's inventory and financial performance. However, the relation between firm's inventory and non-financial performance (e.g., social outcome) is less clear. This study takes a fresh perspective to examine the impacts of supply-demand mismatch on firm's safety performance. Based on a sample set from fashion and textiles related manufacturers, the analysis suggests that supply-demand mismatch (measured by inventory volatility) associates with a higher likelihood of safety incidents. The impact is more salient where the firms are operating in complex (labour intensive) and tightly coupled (high production capacity utilization) environments. This study provides significant contributions to the inventory management literature, occupational health and safety management literature and operational managers.

Suggested Citation

  • Fan, Di & Zhou, Yi, 2018. "Operational safety: The hidden cost of supply-demand mismatch in fashion and textiles related manufacturers," International Journal of Production Economics, Elsevier, vol. 198(C), pages 70-78.
    • Handle: RePEc:eee:proeco:v:198:y:2018:i:c:p:70-78
    DOI: 10.1016/j.ijpe.2018.01.008
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    Cited by:

    1. Lin, Yongjia & Fan, Di & Shi, Xuanyi & Fu, Maggie, 2021. "The effects of supply chain diversification during the COVID-19 crisis: Evidence from Chinese manufacturers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    2. Fan, Di & Liang, Tianheng & Yeung, Andy C.L. & Zhang, Haomin, 2020. "The impact of capacity-reduction initiatives on the stock market value of Chinese manufacturing firms," International Journal of Production Economics, Elsevier, vol. 223(C).
    3. Bendig, David & Brettel, Malte & Downar, Benedikt, 2018. "Inventory component volatility and its relation to returns," International Journal of Production Economics, Elsevier, vol. 200(C), pages 37-49.
    4. Wan, Xiang & Britto, Rodrigo & Zhou, Zenan, 2020. "In search of the negative relationship between product variety and inventory turnover," International Journal of Production Economics, Elsevier, vol. 222(C).
    5. Manavalan Ethirajan & Thanigai Arasu M & Jayakrishna Kandasamy & Vimal K.E.K & Simon Peter Nadeem & Anil Kumar, 2021. "Analysing the risks of adopting circular economy initiatives in manufacturing supply chains," Business Strategy and the Environment, Wiley Blackwell, vol. 30(1), pages 204-236, January.
    6. Fan, Di & Xiao, Chengyong & Zhang, Xiao & Guo, Yujuan, 2021. "Gaining customer satisfaction through sustainable supplier development: The role of firm reputation and marketing communication," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 154(C).
    7. Fan, Di & Lo, Chris K.Y. & Zhou, Yi, 2021. "Sustainability risk in supply bases: The role of complexity and coupling," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).

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