Inventory System

Inventory Systems of Foreign Companies in a Newly Industrialized Country

This survey-based research identifies the different inventory models in use by multinationals operating in Thailand. Unlike many of the newly industrialized countries, Thailand has received relatively less attention in the international operations management literature. This article highlights key factors affecting the type of inventory systems implemented in Thailand, which can be of value to developing countries making the transition into newly industrialized ones. This study shows that inventory systems in Thailand are affected by the type of production, location of the multinationals' headquarters, demands, supply base, and the extent to which materials were either exported or imported.

INTRODUCTION

Like any other country, Thailand is characterized by a unique set of infrastructural, regulatory, legal, and economic conditions. Cheap labor coupled with a relatively stable economic and political climate has attracted Multinational Corporations (MNCs) to Thailand. As multinationals invest billions of dollars into Thai operations, it is essential that they design and manage systems that are congruent with the local needs. One key operational area of interest is the management of inventories.

Inventory systems can be affected by a host of international, product, and supply factors. In this research we attempt to empirically ascertain how inventory systems are influenced by industry type and look for interactions with cultural, infrastructural and economic issues. This research is expected to be of value to MNC managers in designing inventory systems that work more effectively in Thailand. In addition, it could also provide direction to nations making the transition to Newly Industrial Countries (NIC) status from that of developing one.

A significant amount of literature is available on inventory systems. A majority of the findings are derived from experiences in the US, Japan and Western...