Item dwell time in project inventories: A field experiment

• Published in: Computers in industry 2011, Vol.62 (1), p.99-106
• Main Authors: Holmstroem, Jan, Tenhiaelae, Antti, Kaerkkaeinen, Mikko
• Format: Article
• Language: English
• Subjects: Applied sciences; Capital investments; Dwell time; Empirical analysis; Exact sciences and technology; Financing; Firm modelling; Infrastructure; Inventories; Inventory control, production control. Distribution; Inventory management; Inventory metrics; Investment; Item dwell-time alerts; Logistics; Obsolescence; Operational research and scientific management; Operational research. Management science; Project management; Stockpiling; Studies; Supply chain management; Telecommunications; Turnover
• ISSN: 0166-3615; 1872-6194
• DOI: 10.1016/j.compind.2010.07.004

This paper describes the use of item dwell-time measurement in the context of capital investment projects. It contributes to the research on product-centric control and intelligent products by empirically demonstrating the value of item dwell-time alerts in the context of project delivery. The paper shows how item dwell-time measurement can be implemented in the field, and compares item dwell-time alerts to conventional measures of inventory turnover and inventory value in four telecommunications infrastructure projects. We find that when individual items cannot be used interchangeably at project sites, conventional inventory measures do not provide sufficiently timely and accurate information about emerging problems in project inventories. These findings are especially important in situations in which supply chain managers can find alternative uses for materials at other sites or in other projects. Timely reallocation of materials prevents the accumulation of slow-moving items that weigh on project performance by increasing obsolescence and inventory holding costs.