Improvements in Inventory Management: Past Success and Future Opportunities

It is a privilege to contribute an essay in honor of the career and scholarly accomplishments of L. Joseph Thomas. While one needs to talk to only a few of his colleagues and former students to understand that his impact went far beyond his scholarly work, I feel comfortable in stating that he has positively influenced me in more ways and in greater magnitude than most. Nevertheless, in this chapter, I restrict my scope to a discussion of the field of inventory management, a field to which Professor Thomas has certainly made notable contributions, some of which I discuss below.In this chapter, I briefly discuss and summarize the historical inventory management successes achieved collectively by academics and practitioners. This historical success has largely come from reductions in upstream inventories held by manufacturers. I conjecture that future improvements must largely come from downstream inventories, and I discuss three areas of challenge and opportunity: (1) Rapidly changing product and delivery variety offered to the customer, (2) information sharing between channel partners, and (3) aligning incentives between channel partners.